5% Savings Loophole

gazwaldo8

And I currently have a first direct open for the switching and will probably keep it to close it in 6 months as the app sucks and the website is awfu

Just checked the ac on their website again to make sure I understood what I just posted and noticed they offer a further £100 if you leave within 12 months:

We're so certain that you'll enjoy our service better than anyone else's, if you're not happy banking with first direct after six months, and within twelve months, you can leave us and we'll give you £100 for your trouble.

You must have paid at least £1,000 a month into your bank account for six months and have not tried us before.

You'll need to have switched your banking to us using the Current Account Switch Service. Incentives are paid within 28 days of all criteria being met.

You must contact us to claim the Service Guarantee prior to closing your account.

All your other accounts within first direct will need to be closed, including any fixed term products

Thats a direct quote from the website. - Maybe worth another £100 rather than just jacking it in!

Eco_Miser

gazwaldo8 wrote: »

I understood the post to mean the £100 received for switching to the first direct current account as opposed the regular saving account.

So did I, but having got that, why not stay for the highest interest rate currently available with FSCS protection. (You need the current account to get the regular saver).

gazwaldo8

Having only this evening stumbled across the linked saver ac's at 6% - the big drawback for me would be the necessity to keep it for 12 months with continual deposits or you lose the 6% interest for the whole lot down to about the 1% mark. Also the thread stated that overall throughout the 12 months - due to the way it only allows regular monthly investment as opposed to a lump sum - over the 12 month plan it actually works out at 3% (provided you have stuck to the monthly investments).
In my case - Id rather opt for the 5% in tsb without the 12 month timescale limit.

See I have learnt something already! -I am getting there lol

Nevertheless - Eco Miser - sorry - who am I to question or remark upon anything a sage such as yourself can advise us upon? :-/

Spidernick

gazwaldo8 wrote: »

Having only this evening stumbled across the linked saver ac's at 6% - the big drawback for me would be the necessity to keep it for 12 months with continual deposits or you lose the 6% interest for the whole lot down to about the 1% mark. Also the thread stated that overall throughout the 12 months - due to the way it only allows regular monthly investment as opposed to a lump sum - over the 12 month plan it actually works out at 3% (provided you have stuck to the monthly investments).
In my case - Id rather opt for the 5% in tsb without the 12 month timescale limit.

See I have learnt something already! -I am getting there lol

There have been whole threads on this, but I'll let someone who is in a better position than me to explain why the statement in bold above is wrong do so.

jimjames

gazwaldo8 wrote: »

Also the thread stated that overall throughout the 12 months - due to the way it only allows regular monthly investment as opposed to a lump sum - over the 12 month plan it actually works out at 3% (provided you have stuck to the monthly investments).

The interest rate is 6%.

Nothing changes that - why would you expect to be paid interest on money that isn't in the account?

Lungboy

Carnival789 wrote: »

when my first year with nationwide is over (and therefore the 5% rate that goes with it) then I'll be down to 6!

Wouldn't you be better off switching it for a bonus rather than simply ditching it? That what I'm intending for mine.

badger09

jimjames wrote: »

The interest rate is 6%.

Nothing changes that - why would you expect to be paid interest on money that isn't in the account?

OP

You get 6% AER/Gross on the money you have in this account.

You get 0% on any money you don't have in this account

Archi_Bald

gazwaldo8 wrote: »

over the 12 month plan it actually works out at 3% (provided you have stuck to the monthly investments)/

Use this calculator to work out how much interest you earn if the interest is 6% AER.

Then use the same calculator to work out the interest if the AER is 3%.

HTH

Hantsman

The only way you lose out on the 6% reg saver is if you keep your money that's "waiting" in a non-interest paying account. If you put aside 350 a month from your pay, or move it from a 123 account (for example) you will be earning 6% on every penny in the reg saver account, for as long as it is in there and 3% on the money that is waiting.

Hope this makes sense

Lungboy

I think his point is that you earn interest on a gradually growing amount, so the overall interest on the total amount deposited is not 6% of the total. If that makes sense?