Tesco Savings

gatita

If I open a Tesco savings account (the new 3% one)and put the full £3000 in, when the interest is added, will the interest stop? or will the interest just not pay interest?
For example in the Santander account, you get paid interest on £20000 but if it goes over that no interest is paid.

chockydavid1983

The interest won't stop, you'll just only earn interest on £3k

xylophone

If I open a Tesco savings account (the new 3% one)

There is no Tesco Savings account offering 3%.

There is a current account (not new) which pays 3% on up to £3000 - the interest is paid monthly.

You do not receive interest on interest.

It is possible to have two of these current accounts in your sole name.

Jo_Blogs

gatita wrote: »

If I open a Tesco savings account (the new 3% one)and put the full £3000 in, when the interest is added, will the interest stop? or will the interest just not pay interest?

As far as I am aware, interest will not be calculated on any amount above £3,000 for the current account - The interest will not pay interest.

For example in the Santander account, you get paid interest on £20000 but if it goes over that no interest is paid.

As for Santander, that's news to me . There is nothing in their T&C's that state interest will not be paid if you go over £20,000. Interest will certainly not be paid for any month that the eligibility requirements are not met - Not paying in £500 per month and having 2 active DD's.

Bnopse

I'm a bit confused by Tesco's phrasing of 3%aer variable - guaranteed.

To me if something is variable then that's what it is - and they guarantee this for a year. Again, to me this means they guarantee to offer 3%, and to be legally able to decrease (or increase) this percentage until 2019.

Am I interpreting this incorrectly?

jimjames

Bnopse wrote: »

Am I interpreting this incorrectly?

Yes you are. It's not a fixed rate account, it's a current account with variable rate. They've just guaranteed that it will remain at the same variable rate for 2 years

soulsaver

From their site.. (after a few clicks):
https://www.tescobank.com/current-accounts/

3% AER/2.96% Gross variable credit interest on balances up to £3,000 guaranteed from 01/04/17 to 01/04/19. Interest paid monthly. Although this rate is variable it will not drop below 3% AER during the dates shown.

teddysmum

Accounts offering to pay interest on up to a certain amount, do just that. If you are under the upper limit and earn some interest, that interest will earn interest itself the next month, but when the amount in the account goes over the limit (because of earned interest or money paid in), the extra above the limit will not earn interest.

colsten

gatita wrote: »

For example in the Santander account, you get paid interest on £20000 but if it goes over that no interest is paid.

Wrong. You get interest paid on to anything up £20K. You get no interest on any money above £20K.

Example:
You have £22,000 in your Santander 123.
You will get interest for £20,000.
You will get no interest for £2,000.

Tesco current accounts work in a similar way, just that their upper limit that earns any interest is £3,000.

gatita

Thank you all for clarifying things for me.

eric4395

I am still not clear on this if I have 2 accounts and my wife has 2 accounts, with 3000 in each of them at 3%, does that mean we would have approx £360 gross interest( 4x90)
after 1 year and £720 after 2 years. Or would we need to lift the interest every month to get max value out of it. Sorry still confused?