Best place for savings?

badger09

Kim_13 wrote: »

I haven't seen anything published about a Tesco increase, but it would depend on how they structure it. If they increase the fixed rate bonus you wouldn't get the increase, but you would if they increase the standard variable rate of interest (this is most likely) applied to the Internet Saver.

Has anyone got a link to a Tesco announcement?

http://corporate.tescobank.com/25/news/news-releases/tesco-bank-to-increase-interest-rates-for-savings-and-mortgage-customers/?newsid=328

EachPenny

Kim_13 wrote: »

I haven't seen anything published about a Tesco increase, but it would depend on how they structure it. If they increase the fixed rate bonus you wouldn't get the increase, but you would if they increase the standard variable rate of interest (this is most likely) applied to the Internet Saver.

badger09 beat me to it with the link

I don't think it matters much how Tesco apply the rate increase. If it doesn't apply to existing accounts then it is easy enough to open a new one and transfer the money. For that reason I suspect they will increase the rate for existing accounts rather than deal with thousands of applications for a new one to replace an existing.

It is a good point about the T&C change affecting future withdrawals, but if the OP is taking out the money within a few months for a house deposit then it shouldn't be an issue. If the few months becomes next May or later then it might be an idea to think about opening a Tesco current account now, subject to thinking how it might impact on a mortgage application.

RG2015

EachPenny wrote: »

badger09 beat me to it with the link

I don't think it matters much how Tesco apply the rate increase. If it doesn't apply to existing accounts then it is easy enough to open a new one and transfer the money. For that reason I suspect they will increase the rate for existing accounts rather than deal with thousands of applications for a new one to replace an existing.

My T&Cs say that the bonus rate is fixed for 12 months but the underlying variable rate can be changed at any time. It would surprise me if it didn't automatically increase by the publicised 0.15%

ColdIron

If I recall this is what they did when they reduced it to 0.40% from 0.75%

dunroving

RG2015 wrote: »

Yes, it is six although this is only on the Tesco Bank Community site as a post from a Tesco Bank Community manager.

I also found out that Tesco Bank does not apply any increases in the bonus rate to existing internet saver account holders. You need to open a new one. And finally, they pay the basic interest once a year in March and bonus interest 12 months after opening the account.

I called Tesco customer services to ask about this, as I am in a similar situation of wanting to hold money in savings for a house purchase next year, likely spring/summer (so probably less than 12 months). I kept good notes on the name of the customer service rep and the manager she spoke to.

I was told that if you *close* the account before the 12 months is up, you'd receive all interest due at that point. Just thought I'd mention it as the OP would possibly be closing the account when she needs to access the money for her house purchase also.

RG2015

dunroving wrote: »

I called Tesco customer services to ask about this, as I am in a similar situation of wanting to hold money in savings for a house purchase next year, likely spring/summer (so probably less than 12 months). I kept good notes on the name of the customer service rep and the manager she spoke to.

I was told that if you *close* the account before the 12 months is up, you'd receive all interest due at that point. Just thought I'd mention it as the OP would possibly be closing the account when she needs to access the money for her house purchase also.

I believe that this is standard banking practice as they need to clear all pending transactions before they can close the account.

I have just checked my Tesco Bank T&Cs and this is specifically stated.