The Top Easy Access Savings Discussion Area

KTF

Yes, 4% on all doing the 1k shuffle between them once a month.

pb101

Hi All,

Looking at the abysmal rate I am getting with my current A&L savings account (too pitiful to quote here) I need to move my money around to the best I can get.

As my money will be used for a house purchase deposit in the next 3-6mths I'm looking for an instant access account that pays monthly rather than annually. Also because of the amount I will have (around £75-80K) for safety reasons I'm looking to split this between two different institutions. Suggestions ?

I was originally thinking of just upgrading the A&L account to the latest scheme and going with an additional AA acccount, but both appear to only pay annually.

rb10

pb101 wrote: »

I was originally thinking of just upgrading the A&L account to the latest scheme and going with an additional AA acccount, but both appear to only pay annually.

But on both these accounts, interest is calculated daily.

So if you close the account after six months, then you will get six months' worth of interest paid at that time.

Also, note that the AA account is run by Birmingham Midshires, part of HBOS. So if you have any money in Halifax/Bank of Scotland/Birmingham Midshires/Saga/Intelligent Finance, then this all counts as part of the same institution as the AA.

pb101

Thanks - thought under the current climate they may have been some scheme where you loose out. Guess slight downside is that interest is only when the account is closed, so what get the benefit of interest on interest per month. But when you look at the grand scheme of what Im losing on the A&L account then its a no brainer

10_66

NickyDee wrote: »

Citibank Flexible Saver Account Issue 6
Gross % PA 3.25
Net % PA 2.60
AER % PA 3.30

Ulster Bank Pathway
Gross (variable) 3.60%
AER 3.10%

Citibank are paying interest monthly, whilst Ulster Bank is annually.

The AER is the rate that is the most useful to look at, because it tells you what the rate is if you leave your money in the account over a 12 month period. In the example you give above, if you leave your money in Citibank, your money would be earning 3.30% if you leave your interest in the account to earn interest (compounding) over the 12 months. Whereas with Ulster you would only get 3.10% after 12 months (because the bonus drops after 6 months). The 3.60% is what you would be earning up to the 6 month period, so if you wanted to move your money after 6 months, you'd have earned more interest with Ulster over the 6 months. The gain if moving after 6 months though would have to be offset against the interest you would be losing during transfer of money elsewhere, instead of leaving it alone for 12 months. Of course, if the rates are variable you are not guaranteed the rates shown above.

G_M

NickyDee wrote: »

Citibank Flexible Saver Account Issue 6
Gross % PA 3.25
Net % PA 2.60
AER % PA 3.30

Ulster Bank Pathway
Gross (variable) 3.60%
AER 3.10%

Citibank are paying interest monthly, whilst Ulster Bank is annually.

Depends how you use the accounts.
If you put £1000 in each and leave it a year, then after that year the City account will have grown by 3.3% and the Ulster by 3.1, so City is best.

However if you withdraw after 6 months, City will grow by 2.6 (+ monthly compound interest, divided by 2 for half year) while Ulster will grow by 3.6(divided by 2) as their bonus rate only lasts the 1st 6 months. So Ulster is best.

The reason Ulster's AER is lower than the Gross is because of the short term 6 month bonus.

Keys

I've been looking at savings accounts (as my 1 year saving certificate with the local building society is about to mature) and they tend to say "cheque must be drawn on a personal account" (or something like that).

Does anyone know please, can I ask for a building society cheque and mail that or must I get a cheque from the building society made payable to myself, pay it into my current account, then wait (losing interest) until it clears and then write a cheque from my current account? (No, don't have nor want internet banking).

10_66

Keys wrote: »

...they tend to say "cheque must be drawn on a personal account" (or something like that).

Does anyone know please, can I ask for a building society cheque and mail that or must I get a cheque from the building society made payable to myself)...

If they're asking for a cheque, it's usually a personal cheque as it's part of their identification process.

Keys

Yes, thank you, but can that be done with a building soc cheque? 'drawn from the a/c of' or something? Or must it always be via a current account?

Baldur

Keys wrote: »

Yes, thank you, but can that be done with a building soc cheque? 'drawn from the a/c of' or something? Or must it always be via a current account?

You'd need to check with the particular institution with which you intend to open the new account but, in my experience, they will usually require a cheque drawn on your own current account.