Regularly Beat the Best Savings Account Rates Discussion Area

Dr_Ali_G

Does any one know why Martin does not have the Abbey National direct isa at 6.3% garanteed for 13 months on his best buys list? I have looked at it and can not find any thing wrong with it, ie easy access etc, £1 to open, transfers in etc. Whats the catch....... does any one know????

Nedler

Hi Guys;
I have been reading Martins Banking & Savings Web page, I believe I come under the section Top Accounts if you earn over £24,000.
Having digested the info I have planed this saving strategy, am I right or wrong with My plan???
I currently have My wages paid to a Nationwide Flexs Account (which I,d like to keep with a few DB/SO,s) I generally leave to accumulate to around
£5000.00p then move to a high interest Account (Kaup) never droping below £1000.00p.
1. Open a Coventry First Current Account paying £2000.00p PM.
2. Sign up to First Direct 1st Account paying £1500.00p PM,(£100.00p bonus)
3. Transfer £300.00p to First Regular Saver for 12 Months at 8%.
4. Sign up to Ali/Leic Premier Direct Current Account 8.5% paying £500 PM from First Direct 1st Account.
5. Transfer any Excess Monies from First Direct 1st Account into Kaup Ridge high Interest.
I have a large sump in Kaup Ridge,but have not utilized there 12/3 year higher account should I ???
Kind regards Nedler.

Baldur

Dr_Ali_G wrote: »

Does any one know why Martin does not have the Abbey National direct isa at 6.3% garanteed for 13 months on his best buys list? I have looked at it and can not find any thing wrong with it, ie easy access etc, £1 to open, transfers in etc. Whats the catch....... does any one know????

Probably for exactly the reason that you have demonstrated by saying "...direct isa at 6.3% guaranteed for 13 months...." - the product is liable to misinterpretation, as its Terms & Conditions are not a simple as they may appear to be:

1. The present rate is 6.25%.
2. If you read the description, rather than being dazzled by the headline figure, it is not a guaranteed fixed rate; Abbey clearly says "...a preferential variable rate of interest for 13 months" - i.e. the underlying rate can change, the only 'guarantee' appears to be the nebulous term 'preferential'.

bignoise

Is it me or are the maths in this article totally screwed up? I'm looking at the "dripfeed" example given at the bottom of the article, "Start with £6,000 in ICESave, move £500/month to Yorkshire." - so dripfeeding from a 6.2% 'clean' account to a 6.6% 'regular' account. If you do that, it says, you'll earn £400 interest before tax.

I've worked it out myself and you'd earn £385 interest doing it that way - which looks far better than the £200 the table suggests you'd get from leaving it in the ICESave Account for a year. But 6.2% interest on £6000 for a year is £372. You'd only earn £200 in interest if you were starting from £0 and only saving £500 "new money" each month, so it's not really comparing like with like. Strikes me as a bit misleading.

That said, good article - it did prompt me to re-examine my stance that these accounts weren't good value because the rate seemed unfavourable when measured across the year - but I've seen the error of my ways now. You do seem to need a very high rate on the regular saver account to make a significant difference, though - dripfeeding £3,000 from (say) a 6.2% account to a 6.6% account only really nets you £6.50 a year in extra interest.

That said, it's free money...

Paul_Herring

But 6.2% interest on £6000 for a year is £372.

But it's not £6000 for a whole year.

See http://spreadsheets.google.com/pub?key=pNBpCyyhhED0vkKOQenRgWw for a(nother) worked example.

bignoise

I know - that's my point. The example in the article, "Start with £6,000 in ICESave, move £500/month to Yorkshire" has £6,000 in play for the whole year. So comparing that against depositing £6,000 into a normal account over 12 months at £500 a month is not really comparing the same thing. The way that table looks, you'd think that you'd double your yearly interest by dripfeeding.

"Pay £1 a month into a savings account and you'll earn 39p a year in interest, but start with one million pounds and dripfeed £1 a month into a regular saver account, and you'll earn seventy thousand pounds in interest!" - and this is true. That's because you started with a million pounds more in the second example.

trashcan_2

I have just opened a Bradford and Bingley online account. I have other online accounts that are also phone based aswell. My only worry with an entirely online account is if my computer fails and is at the menders for a couple of months like it has been in the past. Has anyone had this trouble and how do you get around it if you need to access your account.

Thanks.

RayWolfe

It is a problem. However, as you rightly say, many providers give you telephone access. In addition you could use Internet cafes and public libraries in the event of a major computer problem.

trashcan_2

If you used an INTERNET caf! or library, would it not be doggy using a public computer for your banking.

bristolleedsfan

trashcan wrote: »

. My only worry with an entirely online account is if my computer fails and is at the menders for a couple of months like it has been in the past. Has anyone had this trouble and how do you get around it if you need to access your account.

Thanks.

Id have thought most people have more than 1 PC in their house as PCs are not expensive to buy, many people like having one upstairs and another downstairs.