Coventry First 'split balance' interest rates

pengers

Although Coventry First have increased their rate as promised to 5.6 for the first year, they have a most unusual way of calculating interest after one year when the 0.6% bonus disappears. If you have £10,000+, you get an AER of 5.27 ( Gross pa 5.22%). Below the £10,000 you get only AER 4.75 % (Gross 4.65%).

Now normally if you have say £11,000 in such an account, you would get the £10,000+ rate for the whole lot. With the Coventry however you only get the higher rate for £1000.01, and the remaining £9,999,99 gets the lower rate of 4.65% gross.

It is so confusing that the AER has a footnote to explain that the rate of 5.27 (£10,000+) is calculated on the asssumtion that you have £77,000 in the account!!

Has anyone heard of 'split balance' accounts before?

tom188

Cahoot used to do them a while ago with an account I seem to remember.