Closing a Santander First Home Saver account mid-year

spikit_uk

Hi all

Does anyone happen to know if all accrued interest is forfeited should I wish to close a Santander First Home Saver account before the anniversary of opening?

Many thanks

atypical

It doesn't matter when you close the account. There is no period of 1 year associated with the account, the rate isn't even fixed for that period.

You can close the account whenever you like without loss of interest (you'll have to have a mortgage interview before you close it). You cannot make partial withdrawals though.

spikit_uk

Thanks Atypical.

So is this true for any account for which interest is paid annually? I’ve often wondered, is a bank obliged to pay interest accrued upon closure, even before the anniversary?

Ta

atypical

spikit_uk wrote: »

is a bank obliged to pay interest accrued upon closure, even before the anniversary?

Yes, unless it is explicitly stated that there will be a penalty in the T&Cs.

spikit_uk

Thanks again atypical, very much appreciated.

adonis10

Had any problems with this account? I'm thinking of opening one as I've currently got 3k in a 3% ISA and £1k in 2.4% easy access, so may as well chuck a load into this 4% (post tax) account.

I guess that £8,600 is the max you can put in in the first year, ie. max £5k to open + £300/month.

The no withdrawal thing is good as it will prevent me from dipping into my ISA all the time!

N1AK

adonis10 wrote: »

so may as well chuck a load into this 4% (post tax) account.

I guess that £8,600 is the max you can put in in the first year, ie. max £5k to open + £300/month.

My partner and I both offered home savers back at the beginning of 2010. The rate was (and still is) about as good as you're going to get for that amount of money, with the ability to withdraw quickly.

Your calculation for the maximum amount one year in is correct. There is nothing to stop you continuing the account beyond 12 months. You can continue to pay in up to £300pm and will receive 5% gross if you do. There is a theoretical limit of £50k but I doubt this will affect many people.

We've now got enough saved for our deposit so I'm planning to drop the payment into the home saver down to the minimum until we buy. I will be putting the rest into a stocks and shares ISA as long term savings.

adonis10

N1AK wrote: »

My partner and I both offered home savers back at the beginning of 2010. The rate was (and still is) about as good as you're going to get for that amount of money, with the ability to withdraw quickly.

Your calculation for the maximum amount one year in is correct. There is nothing to stop you continuing the account beyond 12 months. You can continue to pay in up to £300pm and will receive 5% gross if you do. There is a theoretical limit of £50k but I doubt this will affect many people.

We've now got enough saved for our deposit so I'm planning to drop the payment into the home saver down to the minimum until we buy. I will be putting the rest into a stocks and shares ISA as long term savings.

Job done. Thanks.

Is it monthly or annual interest?

N1AK

adonis10 wrote: »

Job done. Thanks.

Is it monthly or annual interest?

It is paid yearly, or on account closure.

atypical

adonis10 wrote: »

I guess that £8,600 is the max you can put in in the first year, ie. max £5k to open + £300/month.

Others on here have put £5k in as an opening deposit and made their first monthly payment as high as they want to save (e.g. £10k making £15k in total). This means they take the 0.10% interest penalty for 1 month but from then on earn 5% which is obviously more beneficial than drip-feeding it in.

If I remember correctly there wasn't an issue with doing this. You'll have to search the forums though to be sure.

adonis10

atypical wrote: »

Others on here have put £5k in as an opening deposit and made their first monthly payment as high as they want to save (e.g. £10k making £15k in total). This means they take the 0.10% interest penalty for 1 month but from then on earn 5% which is obviously more beneficial than drip-feeding it in.

If I remember correctly there wasn't an issue with doing this. You'll have to search the forums though to be sure.

According to the terms on the website

"You will receive a lower rate of 0.10% gross/AER when you pay in under £100 or over £300 in any calendar month, but for that month only. All rates above are variable. For further details on interest rates please visit our rate and fees pages."

Would appear that they have nothing against doing it.