Alliance & Leicester 5.64% con or no con ?

mrc2

:mad: I've just been in to A&L to take up the fantastic 5.64AER rate and the information MSE gives on 'tips' is wrong, or so says the local branch and H/O when they checked. They have shown me the terms and conditions and it clearly states that you loose a whole months interest on the money invested. They assured me that for instance if I invested100K and I took out any amount I'd loose a whole months interest not just the interest within the month to the poit of withdrawl, so taking money out early in the month ,as per MSE's advice, is of no benefit. ie fag packet calculations that they agreed in branch I'd loose almost £400 per withdrawlon 100k invested. I asked the branch rep. what the true interest rate would be and he calculated that after one withdrawl the rate would drop to 5.21%. or there abouts, not a very good rate and what if you took out x withdrawls theoretically you could end up loosing a huge amount of your money.
Now either MSE is wrong or they're wrong or both but whatever I've spent a whole day mucking about for nothing. When is someone going to make things clear !! and who is going to refund all off those people who have been missled?

tom188

No

Instant_Access_Savings_Account_Article wrote:

The Top Payer If You’re Saving More Than £5,000

Alliance and Leicester’s DirectSaver no-notice account pays a whopping 5.64%, if you’ve a minimum £5,000 and maximum £100,000 balance. It’s available online or over the phone.

Unfortunately, in any month you make a withdrawal, no interest is paid. Therefore, while those looking for a simple long term place to stash cash should be fine, if you regularly access the money, don’t use this, use the accounts below.

Two quick tips about this account. If you are withdrawing money, do it at the beginning of the month as then you minimise the lost interest. Plus, its security limits prohibit online withdrawals over £10,000 to external accounts. If you need to withdraw more, simply phone up and after security checks you can withdraw as much as you like (providing you've got the cash that is!).

I dont see the disparity here - the information is correct and tallies with that provided by AL.

tom188

No

If you take all the money out on the first of the month you wont lose any interest.

I dont see how that makes the rate a con. If you dont make regular withdrawals this a good account. Otherwise its worse than useless.

Madiba_2

No

Quite clear imo

This account is a kind of half way house between the IceSave / ICICI clean accounts, and a bond. Its all down to how likely / often you need access to your dosh.

I guess the best way to use it is to transfer the entire contents of the account to IceSave/ICICI (if you have these) any time you need some cash, then stick it all back in the month after.

StevieJ

Wording:

If you make a withdrawal from your account , no interest will be payable on the whole balance FOR THE CALENDER MONTH on which the withdrawal is made.

So take it all out on the first of the month and

---

you are not paid for one days interest (OK leave pound in).

Seems pretty straighforward to me.

dippy

How does this:

mrc2 wrote:

They have shown me the terms and conditions and it clearly states that you lose a whole months interest on the money invested.

tally with this?:

Instant_Access_Savings_Account_Article wrote:

If you are withdrawing money, do it at the beginning of the month as then you minimise the lost interest.

Dan29

No

mrc2 wrote:

:mad: I've just been in to A&L to take up the fantastic 5.64AER rate and the information MSE gives on 'tips' is wrong, or so says the local branch and H/O when they checked. They have shown me the terms and conditions and it clearly states that you loose a whole months interest on the money invested. They assured me that for instance if I invested100K and I took out any amount I'd loose a whole months interest not just the interest within the month to the poit of withdrawl, so taking money out early in the month ,as per MSE's advice, is of no benefit.

The MSE advice is correct. From A&L's website:

"No interest will be earned on the account balance during the calendar months in which a withdrawal is made or the account is closed."

Examples of a calendar month: December, January, February etc.

Therefore, withdraw early in the month. What A&L have told you is incorrect.

masonic

No

dippy wrote:

How does this:

mrc2 wrote:

They have shown me the terms and conditions and it clearly states that you lose a whole months interest on the money invested.

tally with this?:

Instant_Access_Savings_Account_Article wrote:

If you are withdrawing money, do it at the beginning of the month as then you minimise the lost interest.

If you withdraw at the beginning of the month, you will not lose any interest on the actual funds you withdraw since they have not yet earned any interest in that calendar month. If you withdraw later in the month, you will lose any interest earned during that calendar month on those funds.

As has been said before, if you withdraw the full balance at the beginning of the month, then the interest lost is negligible.

Cypher

No

I think what the original poster is saying is partly true, in that

If you withdraw on the 1st and leave 99k in the account it won't generate any interest for the whole month, so you therefore loose interest.

I had one of these accounts (First Direct not A&L) and to avoid loosing interest, I withdrew what I needed on 1st month, but I also moved the balance to another savings account for the rest of the month.

In the end it wasn't worth the hassle so I left the balance at IceSave and closed the FD account.

mrc2

Thanks for all your responses to my original posting. Some of you seem to be on the ball others nots so. Maybe by taking all of the money out on the first of the month you don,t loose out but for most people achieving anything like 5.64 % is unlikely. To my mind this is typical of the deceptive style of advertising that some banks useif it's not dishonest it is at least designed to trick people. This is prooven by some of the replies here.

anniecave

No

If I was to take out this type of account, I would use it for long-term savings, so for example if I have £10,000 that I intend to use in say 6 months time for say a deposit on a house. I would keep my normal savings, where I am putting money in and money out every month, somewhere else.
So my £10,000 would be earning interest all the time until I close the account, which would be after taking it all out apart from £1 on the first of the month, then closing the account.
It's a savings account to leave your money in and not touch it, not for instant access regular access.
For every given product I would always check the specifics to make sure it's what I really want and suitable for my requirements.