Tesco Savings Loophole Discussion

davem13

I was also looking for some discussion following the latest newsletter and article ( http://www.moneysavingexpert.com/savings/savings-accounts-best-interest ), which compared the Tesco account with the top 'clean' account from ICICI:

"Tesco's Instant Access Savings account pays you higher interest if you save higher amounts. It beats ICICI for savings of over £15,000, where it pays 6.25%, and rises to a huge 6.5% if you're saving over £50,000 (the max saving is £100,000). Yet beware, this rate includes an introductory bonus of 1% for 6 months, in other words the rate drops like a stone after that. So it's only worth it you're prepared to shift your savings elsewhere then."

What struck me as odd (and the reason I was looking here for a discussion) is that the Tesco rates mentioned are gross while the ICICI rate is AER. The Tesco AER rates are only 5.75% for £15k+ and 6.00% for £50k - £100k, INCLUDING the 6 month 1% gross bonus (verified with Tesco), which is actually less than the ICICI rate. So I see no benefit in the Tesco account over the ICICI one, even in the short term.

Can anyone explain why Martin recommended it?

David

dillydilly

wouldn't the AER rate calculation take into account that the offer is only available for 6 months ? If you use it for the 6 months then shift back into ICICI then you're up

davem13

Thanks but I guess I don't understand gross vs AER. I always thought that the AER interest rate would be less than the gross interest rate but the ICICI site ( http://www.icicibank.co.uk/hisave_interestrates.html ) says "With effect from 18th May 2007, the current rate of interest is at an annual 5.89% gross. The Annual Equivalent Rate (AER) is 6.05% and is applicable to all existing and new customers". How can the compound annual interest be more than the pre-tax interest? The Tesco site ( http://www.tescofinance.com/personal/finance/savings/savings/interestrates.html ) shows their gross rates being more than their AER rates, as expected.

I would just like to know where best to put some money. ICICI have made it easier by announcing a new 6.30% AER rate effective 23rd July 2007, making the Tesco promo even less attractive to me.

yorkshirepud_2

Shiggaddi wrote: »

I sent my application off on the 11th June, along with a cheque for £1000. I have kept these funds available since.

On the 23rd June, I received a letter dated 21st June confirming that my account has now been opened, along with my proof of ID returned.

The letter also said I should receive a welcome pack, and any cards shortly.

Since the letter is dated 21st June, I am hoping that they will still honour the 1000 points, as it's not my fault they have had lots of forms to wade through, and my application should have been there allowing for slow 2nd class post, on 15th June at the latest.

On the 25th June, I have seen that my cheque has been debited from my A&L account, so this should certainly clear by the 30th.

Also, if they're extending the deadline past 30th June, does that mean we all have to keep our £1000 there longer?

I was planning on withdrawing money next week!!

I also received a letter dated 21st june stating my account had been opened. I will be expecting my points as i sent my application by recorded post on 13th of june and so can prove they had it in plenty of time.

Rhino666

I am lookng to open a Tesco instant access account.

Can anyone tell me if there is a deal code currently valid when opening a new account.

Thanks

Rob

bristolleedsfan

Rhino666 wrote: »

I am lookng to open a Tesco instant access account.

Can anyone tell me if there is a deal code currently valid when opening a new account.

Thanks

Rob

no code required

Apply by 14th August 2007 and receive an introductory bonus of 1% for 6 months

http://www.tescofinance.com/personal/finance/savings/index.jsp

Rhino666

Thanks for the reply Bristolleedsfan. I was aware of the new rate just scrounging around for an additional 1000 point tesco clubcard incentive to justify transferring ;-)

graymac

bristolleedsfan wrote: »

anyone know what i need to register for internet banking ( ive had no call about telephone banking, dont want that anyway)

when i try and register for internet banking

i click on accounts and policies- register says ill be sent a security code does that come by post or by email as ive trieda few times and not been sent a security code

The security code comes by letter but you still cannot register until you send them a letter with a copy of your signature!! If you try to register without Tesco having received your signature letter then you will be forced to re-register:mad: . The whole process is a shambles and the only explanation offered by Tesco is there has been a postal strike in Scotland. Is this true?

gtmoon

i opened this account mid Jun, had £1k clear credit balance on 30Jun2007. am expecting the 1000 clubcard points to come through on my 3Q clubcard statement, but it wasn't there. anyone had similar problem?

Shiggaddi

Well, my 1000 points have now been added, and show on my statement as points earned from opening a savings account.

Right, my next step should be to close the account, as I've taken all the money out the account, so I should be trying to get the few quid interest that £1000 earned in a few weeks.