5% loophole trick caveats

vikpaw

Hi,
I received Martin's Money Tips this morning and buried beneath the NISA info was a link to the 5% loophole trick for saving at higher rates between Nationwide Flex Direct and TSB. --> http://www.moneysavingexpert.com/savings/savings-loophole

I clicked through to Nationwide and their terms state that if you've had that account before, then you can't have the promo rate. Also, you can only have one account at that rate, unless the second account is a joint account.

Just though i'd point it out as it's not clear in the article and it makes it sound a little too easy. I was unable to click on the link through to the discussion about the article, it gave me permission denied, hence posting here.

I've not checked the TSB terms but found a few posts where people mention they have more than one account so i'm assuming it's ok.

Perhaps someone else can confirm this too and maybe the article can be updated.

EDIT:

Opening multiple FlexDirect accounts: Under the terms and conditions of this account customers are only entitled to one promotional credit interest rate of 5% AER. The only permitted exception to receive more than one promotional rate is if the additional account is held in joint names.

Any additional FlexDirect accounts held or more than one joint account held by you and another customer will result in the credit interest rate being reduced from 5% to 1% within 3 working days of the account being opened. If you have previously held a FlexDirect account in the last 12 months, you will not be entitled to the introductory rate or offer under a new agreement and therefore you will receive the standard 1% AER interest rate.

EDIT 2:
TSB limits you to two accounts, but otherwise seems pretty good.

Classic Plus is available to new and existing customers and you can have up to two accounts.

jimjames

It's not a loophole and it's not a problem to have 2 tsb accounts.

Mse could make more of it but its not realistic to expect them to list all the reasons why you couldn't have an account.

Loads of threads on here all about the high interest current accounts.

PS it is really easy so that bit is correct!

vikpaw

They call it a loophole, it's just being smart really, and exploiting the rules which allow you to have more than one account.

My point was really that their example shows 2 Nationwide and 4 TSB accounts in a ring, however, you can only have 2 TSB and 1, possibly 2 Nationwide accounts. So it needs updating.

It is easy, but it's also easy for someone to set it up and not notice they aren't getting the full 5% they expect.

colsten

It would be quite foolish to set up any account by purely going by the information you find on a website that is not run by the provider of the account. It goes without saying that it is the T&Cs of the provider that govern the account and so they need to be properly understood by the applicant / account holder.

It is very easy to set up and manage all of these accounts, which is manifested by the number of people who discussed these accounts, and more like them, on the MSE Forum about 2-3 years before the "loophole" article was first published.

jimjames

vikpaw wrote: »

They call it a loophole, it's just being smart really, and exploiting the rules which allow you to have more than one account.

You don't need more than one account. For someone with up to the average savings in the UK of £2000 one account will suit them perfectly and give them far more than any ISA.

vikpaw wrote: »

My point was really that their example shows 2 Nationwide and 4 TSB accounts in a ring, however, you can only have 2 TSB and 1, possibly 2 Nationwide accounts. So it needs updating.

I've not read the article but it sound like it is correct as a couple you can have the accounts you've listed.

It's not this that really needs updating, it is all the ISA articles that say use an ISA at all costs - that is REALLY bad advice. Even at the top of this forum the main link says "3% savings account" but no mention at all of the 5% accounts - that isn't money saving.

EDIT - in the table the article clearly shows that you can only have 1 account plus one joint for Nationwide.

SallyG

Why are some banks luring us in/allowing us to dip in and out - with these current account deals but apparently don't want our ISA cash -what's the advantage for them?

Herbalus

SallyG wrote: »

Why are some banks luring us in/allowing us to dip in and out - with these current account deals but apparently don't want our ISA cash -what's the advantage for them?

The banks don't need our money, which is why interest rates on savings accounts is very low.

Offering a higher rate to get a current account customer is about gaining market share. I don't think the majority use these accounts like some forumites on here (though I think the number's rising), because I can imagine these accounts are making the banks a loss.

vikpaw

I know it's a good deal. I know you don't have to have more than one account, i was just pointing out it's not that clear.

colsten wrote: »

It would be quite foolish to set up any account by purely going by the information you find on a website that is not run by the provider of the account. It goes without saying that it is the T&Cs of the provider that govern the account and so they need to be properly understood by the applicant / account holder.

It is very easy to set up and manage all of these accounts, which is manifested by the number of people who discussed these accounts, and more like them, on the MSE Forum about 2-3 years before the "loophole" article was first published.

I understand the onus is on us to read the T&Cs, however the point of the article is to show how these little known (to most) terms allow saving well over what you might expect. I haven't read the countless other posts on here. I came at it as an occasional reader of the tips email.

I don't think it's much to ask for the so called 'experts' to add something to the top of the article that explains this is achievable only by a minimum of two people. Maybe they did, and i missed it.

I'm sure there are plenty of regulars here who know all about these little tricks, but equally in the current on-going climate i'm sure more and more people are finding their way here and asking for some clarity isn't a bad thing.

The table i believe is about a single person's eligibility right? I don't see how the 4 accounts allowable by TSB is possible unless it's two people. It's not clear. I don't believe they have to be joint accounts either. Just that one person is allowed up to 2 accounts.

The article was 'updated' in june 14, i just thought i'd point out that it could be improved. As the link to the 'discussion' about the article was invalid i started a new thread but i'll think twice next time.

I didn't mean to start a whole debate about it.

Herbalus

vikpaw wrote: »

I didn't mean to start a whole debate about it.

:rotfl:

That always happens around here

Freecall

Herbalus wrote: »

:rotfl:

That always happens around here

Oh no it doesn't!

vikpaw

Freecall wrote: »

Oh no it doesn't!

I should know better! Just thought I was being helpful.:beer: