NEW ICICI 5.85% Savings Product

masonic

zaccy wrote:

I see NO strings attached on this latest offer, the UK banks should take note.

Well, perhaps a small one...

Suppose you take up this account and meanwhile ICICI increases the rate of their standard account (say to 5.65% as well).
If you subsequently made a withdrawal, you would only receive the original 5.45% (because 5.45% was the rate the standard account was paying at the time of opening the fixed term account) even though others who have not taken up the account would be receiving 5.65% for at least some of that perod.

Paul_Herring

zaccy wrote:

I see NO strings attached on this latest offer

I see one right off. You're tying your money up for at least 6 months - this isn't 'instant' access.

I see various other strings around the "UNFIXED" rate, whatever that means - see my post #14.

norm_diploom

Paul_Herring wrote:

I see one right off. You're tying your money up for at least 6 months - this isn't 'instant' access.

I see various other strings around the "UNFIXED" rate, whatever that means - see my post #14.

Paul, I don't think that the above is right about tying up your money for 6 months - the E mail from ICICI about this account clearly states that you can withdraw the money within 3-4 working days. It's clumsily worded, but my impression is that this is what they mean by "unfixed". The money withdrawn would still get the interest rate applicable for the Hisave savings account at the time of opening the Hisave term deposit acct ( currently 5.45% gross). What I couldn't find is any mention of how the interest on the withdrawn money would be paid, and I suppose it's likely that this would be paid at the end of the 6 months, so the interest would be "locked away". Hard to see what you could lose, provided you keep an eye on interest rates for the savings account, and move money back to that if interest rates go higher than the 5.65% for the term account, or indeed if they do reduce rates for the term account in the future.

On re-reading the t&c's today, something else struck me - ICICI say that the initial account is opened for 6 months, with the option to renew at the end of the 6 month term or take the money + interest out. They then go on to say that if they aren't told otherwise they will automatically renew for 6 months. Presumably this could go on indefinitely, with them renewing every 6 months in the absence of other instructions. If you take the view, as I do, that we are likely to see at least one interest rate rise this year ( and possible 2 or 3), then the interest rate on the ordinary Hisave account could easily overtake the 5.65% rate for the fixed term account. If i were of a devious mindset, I might just think that ICICI were garbbing our savings with a good headline rate, and relying on future inertia so that we would leave those hard-earned savings in a less competitive account. However, being good MSE'rs, we would keep an eye on rates and not let that happen wouldn't we?!

Paul_Herring

norm wrote:

Paul, I don't think that the above is right about tying up your money for 6 months - the E mail from ICICI about this account clearly states that you can withdraw the money within 3-4 working days.

Here we get to the string that is attached - if you withdraw early, you lose the bonus rate. Perhaps I wasn't explicit enough:

If you want to retain the initial rate, you MUST keep your money in the account for 6 months. If you don't, it's as if you didn't apply for it to begin with.

Better?

It's clumsily worded,

It most certainly is. As have been a few of their communications. Anyone remember the upgradation email?

mongmoney

So then paul, should i bother moving £1K from existing HiSave account into 6 month fix or not? Can only leave it there for 6 months as will come to the end of stooze. Any reply appreciated.

norm_diploom

mongmoney wrote:

So then paul, should i bother moving £1K from existing HiSave account into 6 month fix or not? Can only leave it there for 6 months as will come to the end of stooze. Any reply appreciated.

I certainly wouldn't bother - difference of 0.2% gross (5.65% - 5.45%) over 6 months on £1000 is 0.2 x 1000/100 x 6/12 = £1 before tax

Besides which, there's a good chance that BoE will put up rates by 0.25% in Feb - if ICICI pass this on in full then ordinary Hisave rate will be 5.70, without any of the hassle.

For larger amounts, as Paul and others have illustrated above, this new account may be worthwhile - I haven't yet made my own mind up as too many details still unclear.

lswwong

Yup! I am now convinced that unless I have £100K to put in, it is not worth taking this offer up at this point in time.

Thanks all for speedy response and advice

Paul_Herring

mongmoney wrote:

So then paul, should i bother moving £1K from existing HiSave account into 6 month fix or not? Can only leave it there for 6 months as will come to the end of stooze. Any reply appreciated.

You'll face no transfer delays, so ignore my posts regarding that.

If you can leave it there for the full 6 months it may be worth it.

If they'll increase the rate if the base rate goes up, (and it'll be there for the full 6 months) then definately go for it. It may be worth messaging them and asking for a definitive answer for this.

Biggles

Has anyone who expressed an interest initially by their message system heard anything yet? I haven't.

lswwong

Taken from ICICI's website re HiSave account:

"Guarantee of returns

The gross interest rate on your HiSAVE Savings Account will be above the Bank of England Base rate by at least 0.25%. These terms are valid until 31 December 2007."

So with today's base rate rising to 5.25%, that should bring HiSave's gross interest rate to 5.5%. This is still 0.15% below that of the term savings account (paying 5.65% gross).

But I am still content to leave my money in the ordinary HiSave account.