Alliance & Leicester 5.64% con or no con ?

Cypher

No

I agree with anniecave,

I used the First Direct eSaver to build up some savings, it was untouchable savings at the time. The reason I touched it in the end was I had managed to save over £3000 and decided that as I had kept my hands off it whilst I grew it, I should now move it into an ISA. So I removed £3k on the 1st of the month. I actually had something like £3650 at the time so the £650 also got moved to ICEsave as it wouldn't earn any interest at FD. Once at ICESave, which by coincidence had just opened, I realised it was actually a better account than FD one so I closed the FD one.

RavCat

As an aside to the above conversation (sorry if i'm hijacking the thread), when do you need to supply the starting balance when opening this account? Is it as you apply, or a few days later once the account is set up and you have your internet banking details?

The reason I ask is that my starting £5k will be coming from an HSBC Online Saver, which has the same "take it all out on the 1st" condition attached to it, and so I'd like to time it right.

fonesaver

I opened the account with zero balance and then moved in £5k later.

sashacat

I've done the same..zero balance and then moving it all from my egg savings account, which I have just opened to move my stooze money into from my egg money card

roger56

mrc2 wrote:

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.

I don't think A+L are being deceptive, their web-site clearly states
"No notice for withdrawals although no interest is earned on the account balance in any month in which a withdrawal is made or the account is closed"

However, I agree in most cases the account is probably going to end up providing a worse return than say ICICI or Icesave who have simple terms and 5.45% AER.

A+L tend to be gimmicky to draw in customers and then hope they will not move money when the interest rate becomes less competative.

Madiba_2

No

In a way, this rule is quite good in that it kind of forces you to save more because it makes you think twice before withdrawing small amounts. Thats what savings is all about anyway, you save until you have the money you need for whatever it is you are saving for.

I intend to open this account when I have the £5k I need to open it and get interest. I have my "instant access" with ICICI and Icesave, so I dont plan to touch this A&L money. I plan to use it as income for my regular saver account :-D

Milarky

No

So, just to be clear about this account, you need to open with £5,000 and no interest is payable where the balance of £5000 isn't maintained BUT you are allowed to reduce the balance (eg to £1) and still keep the account open?

(If they had a minimum balance condition too then you would automatically lose interest on £5k for one month - however much you withdrew and placed elsewhere in that time. I can't believe A&L would be stupid enough to try that on with customers)

MarkyMarkD

Yes, Milarky, you are correct.

I don't have any problem with the terms of this account - and A&L weren't the first to offer it either. It encourages long-term savings, but allows penalty-free withdrawal (of the full account balance on the 1st day of any month) - and you can continue using the account as long as you keep a nominal £1 in it.

I don't think it's fair to state that "most people" will get less than on an account paying 5.45% AER either. "Most people" will either open this account to use it as a long-term savings account, or to keep the money in it until A&L's rate is less good than someone else's. If you have a reasonable lump of savings which you don't intend to spend in the medium term, this sort of account works very well for you.

If you want to put money in and out like a yo-yo, obviously a simple account paying 5.45% AER is more beneficial - but then, you shouldn't have opened the A&L account in the first place.

Steve_xx

I want to open another can of worms regarding this account. Below is an extract from A&L's terms and conditions regarding it. I read this to be saying that there will be no interest paid on any amount between £1 to £5000, regardless of the fact that the balance may be in excess of £5k. Note the placement of the word investment where I would expect to read the word "balance".What do others think?

36.8 No interest will be paid on any amount invested, which is below or above the minimum and maximum investment permitted in the Account, as
detailed in clause 36.3.