A&L, HSBC ."No interest paid in any month you make withdrawal". What does this mean?

gekktel

There are two savings accounts, HSBC and Alliance & Leicester, which say "no interest is paid in any month you make a withdrawal". Can someone tell me what this means exactly. Im not entirely clear.

Say ive got £12,000 and I withdraw just £3000. Do I lose the months interest on the entire £12000 or just the £3000? Also, ive heard that if you withdraw on the 1st of the month you wont lose the interest - how does this fit into the equation?

espresso

gekktel wrote: »

There are two savings accounts, HSBC and Alliance & Leicester, which say "no interest is paid in any month you make a withdrawal". Can someone tell me what this means exactly. Im not entirely clear.

Say ive got £12,000 and I withdraw just £3000. Do I lose the months interest on the entire £12000 or just the £3000? Also, ive heard that if you withdraw on the 1st of the month you wont lose the interest - how does this fit into the equation?

"no interest is paid in any month you make a withdrawal"

Put simply it's a bit of a con. Any month that you make any withdrawal, you will get no interest for that month - None, Nil, Zilch, normally credited on the 1st of the following month.

Beate

If you make a withdrawal in a month, you will not get interest on the money that month at all.

It is not true that you won't lose interest at all if you withdraw money on the 1st of the month, but should you want to empty your account, do it on a 1st, as you then only lose one day's interest.

Hungerdunger

gekktel wrote: »

There are two savings accounts, HSBC and Alliance & Leicester, which say "no interest is paid in any month you make a withdrawal". Can someone tell me what this means exactly. Im not entirely clear.

The exact wording in A&L's FAQ is: "No interest is earned on the account balance during the calendar months in which a withdrawal is made or the account is closed."

So it's pretty clear from that that you will receive no interest at all for any month in which you make a withdrawal.

Beate

espresso wrote: »

"no interest is paid in any month you make a withdrawal"

Put simply it's a bit of a con. Any month that you make any withdrawal, you will get no interest for that month - None, Nil, Zilch, normally credited on the 1st of the following month.

I wouldn't say it's a con - it is designed for long-term savings, i.e. don't touch the money. These accounts usually provide you with better interest rates, although at the moment there are better savings accounts out there that pay you more while being totally flexible - the Bradford & Bingley Internet Saver pays 6.4% and does not penalise you for withdrawing money.

espresso

Beate wrote: »

I wouldn't say it's a con - it is designed for long-term savings, i.e. don't touch the money............

Well I would. Strange how the largest bank has to resort to such low tactics to get your money. I opened one of these accounts and now I find that they have different rates of interest for this account, dependant on when the account was opened. see here for "Products No Longer Sold" rates for the Online Saver.

You would be silly to use this account for long term savings with such a pathetic interest rate!

:rolleyes:

Judwin

gekktel wrote: »

Say ive got £12,000 and I withdraw just £3000. Do I lose the months interest on the entire £12000 or just the £3000? Also, ive heard that if you withdraw on the 1st of the month you wont lose the interest - how does this fit into the equation?

The trick is to withdraw all bar £1 from these accounts on the 1st of the month, and then put whatever you dont need into a flexible account. Then on the last day of the month, transfer it all back from the flexible account to the inflexible one. If you keep all the accounts with A&L, transfers will be instant, so you can minimise the time the transfers take, thus avoiding loss of interest. The current rates are :

A&L Direct Saver = 6.3%
A&L PlusSaver Account = 5.25%
A&L Premier Direct = 4.75%**

So in your example of needing to with draw £3000 from £12000....

1st of month
Transfer £11999 from Direct Saver to Premier Direct*
Transfer £8999 from Premier Direct to PlusSaver
Spend £3000 from Premier Direct

30th/31st of month
Transfer £8999 from PlusSaver to Premier Direct
Transfer £8999 from Premier Direct to Direct Saver*

This way, you get a months interest on the £8999 at 5.25% (about £31) rather than the 0% you whould have got if you'd left it in the Direct Saver.

Cheers
Judwin

* Note : AIUI transfers to/from the Direct save have to go via an A&L current account

** May be higher if your still in your first year

Jonbvn

Judwin wrote: »

The trick is to withdraw all bar £1 from these accounts on the 1st of the month, and then put whatever you dont need into a flexible account.

I have the HSBC oline saver a/c. When I withdraw funds, I leave a zero 0.00 balance in the account from the 1st of the month. Never causes a problem, since I have a current account.

HTH.

Chaddee

espresso wrote: »

Well I would. Strange how the largest bank has to resort to such low tactics to get your money. I opened one of these accounts and now I find that they have different rates of interest for this account, dependant on when the account was opened. see here for "Products No Longer Sold" rates for the Online Saver.:rolleyes:

I asked in my branch about this and was told that even though I opened the account in December when the rate was lower, I would still get the most up to date interest rate. I also got a message in my Internet Banking (not a phony email!) saying the same thing.

espresso

Chaddee wrote: »

I asked in my branch about this and was told that even though I opened the account in December when the rate was lower, I would still get the most up to date interest rate. I also got a message in my Internet Banking (not a phony email!) saying the same thing.

I suggest that you calculate the interest that you are actually getting. You were either misinformed or have misunderstood what you were told. Yes you will get the most up to date interest rate but it is dependant on when the account was opened as stated on their published interest rates webpage.

:rolleyes:

Beate

Judwin wrote: »

The current rates are :

A&L Direct Saver = 6.3%
A&L PlusSaver Account = 5.25%
A&L Premier Direct = 4.75%**

Depends when you opened them! My Plus Saver is still 5.25% but if you opened it now, you would get 6% on it. A&L have this annoying habit too of not updating existing members' interest rates. My Premier Direct Account is at 6.1%, new applicants would get 6.5%.