NOW CLOSED - Northern Rock - 3.01% AER easy access, min balance 1K

SnowMan

Northern Rock have launched e-saver issue 5, paying 3.01% AER variable for those with 1K to invest.

Includes a 1.5% bonus for 12 months.

Note 3.01% AER is for the annual interest and monthly options so you can choose either and get the same AER.

Minimum investment 1K. Maximum investment 100K. Don't let balance fall below 1K as nominal 0.1% interest rate applies.

Now showing on the Northern Rock website here.

On line account, apply through their website.

Interestingly they say in the key product information they will give you 2 months notice of any drop in the interest rate which seems very decent of them.

Tip: When applying it asks you to choose an account name, you might want to choose something like "bonus ends on....." as an extra reminder.

Those with an e-saver 4 (3% AER for annual option, including a higher bonus element of 2% and 10K minimum balance) may wish to transfer to the e-saver 5 to access the lower 1K minimum balance and to start the 12 month bonus clock ticking again. To do this log in to your Northern Rock account, choose the option to apply for a new account and you get the option should you choose to do so to close the e-saver 4 and transfer the balance and interest across. Of course there is no guarantee that the e-saver 5 will pay the same (or marginally higher by 0.01% to be precise) rate as the e-saver 4 in the future.

I am asuming that those with e-saver 3 (2.5% AER) can open and transfer to an e-saver 5 account in the same way to get the higher 3.01% AER. Note that the minimum balance is £1,000 on the e-saver 5 (£1 on the e-saver 3) and the interest rate includes a 1.5% bonus (the e-saver 3 rate is a clean rate with no bonus element). You may want to keep the e-saver 3 open with £1 in it to keep your options open.

2010

SnowMan wrote: »

Those with an e-saver 4 (3% AER for annual option, including a higher bonus element of 2% and 10K minimum balance) may wish to transfer to the e-saver 5 to access the lower 1K minimum balance and to start the 12 month bonus clock ticking again. To do this log in to your Northern Rock account, choose the option to apply for a new account and you get the option should you choose to do so to close the e-saver 4 and transfer the balance and interest across. Of course there is no guarantee that the e-saver 5 will pay the same (or marginally higher by 0.01% to be precise) rate as the e-saver 4 in the future.

Thanks for that SnowMan,

It`s certainly well worth thinking about for anyone with the E-saver 4.
As you point out the obvious advantage is the minimum £1k balance but probably the new 12 month start.

Is there anything to stop them lowering the interest rate of e-saver 4, currently 3% ?

talexuser

Thanks again Snowman. I transfered over just to start the 12 month clock ticking again.

2010

Just done it myself and it all went smoothly.
Some of the other banks could learn a lesson from NR for 24/7 online banking.

SnowMan

2010 wrote: »

Thanks for that SnowMan,

It`s certainly well worth thinking about for anyone with the E-saver 4.
As you point out the obvious advantage is the minimum £1k balance but probably the new 12 month start.

Is there anything to stop them lowering the interest rate of e-saver 4, currently 3% ?

They have to give two months notice to lower the 3% AER rate on the e-saver 4 (and 2 months notice to lower the 3.01% AER on the e-saver 5 for that matter) but they can do that, and they can lower one but not the other.

More likely is a rise in bank base rate and they can then immediately choose whether to pass that on in full or in part or not at all to the e-saver 4 and/or e-saver 5. That way they can change the e-saver 4 rate relative to the e-saver 5 rate.

Trouble with leaving the e-saver 4 open with £1 in it is that the accrued but unpaid interest as well as the £1 are subject to the 0.1% penal rate for balances less than 10K.

talexuser

SnowMan wrote: »

Trouble with leaving the e-saver 4 open with £1 in it is that the accrued but unpaid interest as well as the £1 are subject to the 0.1% penal rate for balances less than 10K.

and that's an excuse for keeping 10k in the esaver4 which I have done - so you can then transfer either way to whichever gets the better rate in the coming months The net of 0.008% on 10k of 80 pence won't lose me any sleep

Though usually the older accounts get worse rates than the newer accounts as a generalisation - and a further newly launched esaver 6 or 7 in the future may beat both!

2010

Thanks to both of you,

I went ahead and transferred the whole lot last night into the e-saver 5.
It was done instantly, even adding on the interest and keeping the same account number.

Very, very impressed, this is how online banking should be.

claire07

Wow, I too am impressed. Reading the posts it seemed so easy but previous experience of trying to transfer other online instant access accounts had made me doubtful. However, as previously posted, once I had signed in to the esaver 4 they made it so easy to transfer to esaver 5 and even added the accumulated interest by the end. It was also showing on my accounts by the time I had finished. Why can't they all be like this?

2010

claire07, you`re so right.

Puts the likes of the Halifax to shame.

Special_Saver2

Thanks to everybody above.

I have just transferred from my existing issue 4 account into an issue 5. I agree that it was amazingly easy. It took less than 5 minutes and my account is now showing up as an issue 5 account. As mentioned above, the account number has remained the same. Also, their computer has immediately calculated the interest due on closing my issue 4 account (although it is not yet available in the cleared balance, it shows up in the uncleared transactions section).

I am impressed!

SS2

Edit: I have just seen claire07's post above. Just to explain - the interest added on closing the account was visible once I completed the application for issue 5 but has not yet been added to my cleared balance. I expect it will be added in the next few bank working days and I am not worried about it. The interest shows up as a pending credit marked "product transfer" in the uncleared transactions tab after selecting the view statement menu.

ChiefGrasscutter

claire07 wrote: »

Wow, I too am impressed. Reading the posts it seemed so easy but previous experience of trying to transfer other online instant access accounts had made me doubtful. However, as previously posted, once I had signed in to the esaver 4 they made it so easy to transfer to esaver 5 and even added the accumulated interest by the end. It was also showing on my accounts by the time I had finished. Why can't they all be like this?

Probably because they would all go bust!

Bradford and Bingley made it easy to transfer from one account to a new higher interest bearing account. In fact it was so simple and so regularly woudl they bring out new accounts that you could put it in you diary. By doing this not only did you get higher interest but you got it compounded each time you closed an account and moved to the next one: costing them a lot of money....until they went bust that is
A&L similarly...a new account could be opened overnight..easy....until Santander bought it as a going concern.
Then there was the Admin/account opening side at IceSave run by the newcastle building society's subsidiary. It was wonderful .....at long it lasted that is until Icesave collapsed.

N.Rock have suddenly over the last few months become very competitive for savers money...and you have to ask why..........my guess is that NR is pumping itself up for a sale.