Brad & Bing 10% Christmas Saver

Money_Cub

Can anyone remember if Martin recommended the Bradford & Bingley 10% Christmas Saver?

I ask because I've just cashed this in and in reality the rate is around 3%.

A friend who was an accountant and now a lawyer looked it over and its a combination of clever wording and interest payments.

I just wondered if anyone else had 'fallen' for this and whether or not our Martin was also duped.

Would be interested to hear your views/experience.

kanchhelskis

hi ya its more than 3% it works out about 4% net on the maxium totals.

tom188

OK well do you think you should have earned 10% pa on the full amount? Why should you when the account was open for only 10 months or so?

You havent had all the money in the account for the whole year (in fact any of it so will only earn a proportion of the 10%). eg 1st payment 10/12 of 10%, 2nd payment 9/12 of 10%, 3rd payment 8/12 of 10% etc.

Interest is calculated daily on the balance of the account, not on the total balance at the end. Same as any account really - you only get interest on money you put in.

jonnyb

I make it more like 5.6%, as an apr equivalent.

Assuming the full £250 saved each month so total saved = £3000.
Interest should total approx. £167 at maturity.

167/3000 X 100 = 5.56%. I have a useful, very simple spreadsheet for the calc, but have no idea how I can post a link to it on here.

lipidicman

Money_Cub wrote:

Can anyone remember if Martin recommended the Bradford & Bingley 10% Christmas Saver?

I don't remember. I heard it on Moneybox on Radio 4

Money_Cub wrote:

I ask because I've just cashed this in and in reality the rate is around 3%. A friend who was an accountant and now a lawyer looked it over and its a combination of clever wording and interest payments.

The rate is NOT 3%. Your calculations are wrong. Your friend who is an accountant should know better (my partner is an accountant and she is amazed at how many of them cannot do simple calculations or manage their own money!).
Remember you did NOT have £1500 on deposit for a year. You had an average balance of around £825 in the account. You had this average balance for 10 months. You earned 10% (0.1 as a decimal).
So £825*0.1*(10/12) = £68.75. After Tax this is £55. This is what I got. The same money in a normal 5% account would have earned half this. So I have made myself an extra £25-£30.

Money_Cub wrote:

I just wondered if anyone else had 'fallen' for this and whether or not our Martin was also duped. Would be interested to hear your views/experience.

No one was duped. And now you have an alternative view!

edit: others posted whilst I was writing this. But note there are mistakes above. It was £150 for 10 months, not £250 for 12 months like some other accounts

cheggers

I wasted more time and effort than I earnt interest on my xmas saving return.

At least B&B now have all my details to bug me with marketing junk!!

lipidicman

cheggers wrote:

I wasted more time and effort than I earnt interest on my xmas saving return.

You should have made this assessment before taking it out. It was pretty lucrative for me

I went in and opened the account a few days after it was announced whilst I was in town (20 mins)

I set up the SO online (5 mins)

I went in and asked them to issue me a cheque and went on my merry way (5 mins)

30 minutes! I've spent more time trying to help people get over being 'ripped off'!

hang on,
30 minutes for an extra £25?
That's £50 an hour!

Money_Cub

lipidicman wrote:

The rate is NOT 3%. Your calculations are wrong. Your friend who is an accountant should know better (my partner is an accountant and she is amazed at how many of them cannot do simple calculations or manage their own money!).

Its quite unnecessary to be so rude, he was doing the calculation in his head while standing at a train station, hence my reason for writing 'around' 3%.

echo

jonnyb the maximum per month was £150

lipidicman

Money_Cub wrote:

Its quite unnecessary to be so rude, he was doing the calculation in his head while standing at a train station, hence my reason for writing 'around' 3%.

Pardon me for taking the time to explain the calculation to you.

Edit: OK when I read my post it might seem a little rude (tone is so hard to convey on forums, plus you don't know who you are speaking to so confusion often arises). However the fact that I have taken my time to help you understand your misunderstanding should reassure you of my intentions. I try to be helpful here, most people appreciate it. If, say you were to thank me I would be only one thank you away from having three hundred!

lipidicman