MSE News: Northern Rock 3% savings deal is highest in six months

Former_MSE_Guy

This is the discussion thread for the following MSE News Story:

"It is the first time since June a standard easy access account has broken that mark ..."

Read the full story:
Northern Rock 3% savings deal is highest in six months

soulsaver

MSE_Guy wrote: »

This is the discussion thread for the following MSE News Story:

"It is the first time since June a standard easy access account has broken that mark ..."

Read the full story:
Northern Rock 3% savings deal is highest in six months

Standard? £10k minimum or 0.1%.

johnmoney05

More posts and discussions here. https://forums.moneysavingexpert.com/discussion/2913936

MarkFromCornwall

MSE_Guy wrote: »

This is the discussion thread for the following MSE News Story:

"It is the first time since June a standard easy access account has broken that mark ..."

In my opinion, an account that doesn't permit Faster Payments out should no longer be considered "standard easy access".

johnedwards3005

Unless you read the terms of the account, you would not realise that in order to get monthly income, you have to accept a much lower interest rate (2.74% AER) than the 3% advertised. This is very unusual nowadays - the AER for monthly interest is usually the same (or fractionally less) than the annual payment AER. This penalty will be important to those needing to live off the interest on their savings (especially pensioners) who would want to deposit large sums at an (apparently) market-leading rate.

rb10

johnedwards3005 wrote: »

This penalty will be important to those needing to live off the interest on their savings (especially pensioners) who would want to deposit large sums at an (apparently) market-leading rate.

It shouldn't be important at all.

This is an instant access account.

That means there is nothing to stop pensioners from opting for annual interest, and, each month withdrawing an amount equivalent to the interest accrued in that month. At the end of the year they'll be in the same position as 3% AER, paid monthly.

Unfortunately, some peoples mindsets don't allow for this...

D1zzy

johnedwards3005 wrote: »

Unless you read the terms of the account, you would not realise that in order to get monthly income, you have to accept a much lower interest rate (2.74% AER) than the 3% advertised. This is very unusual nowadays - the AER for monthly interest is usually the same (or fractionally less) than the annual payment AER. This penalty will be important to those needing to live off the interest on their savings (especially pensioners) who would want to deposit large sums at an (apparently) market-leading rate.

Thanks for this (that'll teach me to read the T's & Cs properly)! Anyway messaged them to change my monthly to annual interest which appears to be no problem.

soulsaver

johnedwards3005 wrote: »

Unless you read the terms of the account, you would not realise that in order to get monthly income, you have to accept a much lower interest rate (2.74% AER) than the 3% advertised. This is very unusual nowadays - the AER for monthly interest is usually the same (or fractionally less) than the annual payment AER. This penalty will be important to those needing to live off the interest on their savings (especially pensioners) who would want to deposit large sums at an (apparently) market-leading rate.

They will change it to yearly with a phone call...

soulsaver

rb10 wrote: »

It shouldn't be important at all.

This is an instant access account.

That means there is nothing to stop pensioners from opting for annual interest, and, each month withdrawing an amount equivalent to the interest accrued in that month. At the end of the year they'll be in the same position as 3% AER, paid monthly.

Unfortunately, some peoples mindsets don't allow for this...

So NR (the govt) just do it to scalp a few pence of the more gullible/vulnerable/complacent in our society?
Should be ashamed.

Consumerist

rb10 wrote: »

That means there is nothing to stop pensioners from opting for annual interest, and, each month withdrawing an amount equivalent to the interest accrued in that month. At the end of the year they'll be in the same position as 3% AER, paid monthly.

Unfortunately, some peoples mindsets don't allow for this...

Because the interest is credited to the account annually, however, you would need to deposit at least £10,275 in order to avoid reverting to 0.1% during the course of the year.

Consumerist

MarkFromMullion wrote: »

In my opinion, an account that doesn't permit Faster Payments out should no longer be considered "standard easy access".

I don't know of any savings account which allows FPS transfers out.