The Top Easy Access Savings Discussion Area

Steve_xx

bogleboogle said:

Hi all,
What are the differences between the NS&I Direct Saver and the Income Bond account? Specifically, I don't really understand how the latter works. It has a yield of 1.16% which is higher than the Direct Saver's interest rate, but is the capital at risk? If not, what are the advantages of the Direct Saver over the Income Bond account? 
Thanks  

The difference in the main is that the Income Bond requires deposits or withdrawals of £500 or more. The interest on Income bonds is paid monthly out of the account, whereas the Direct Saver interest compounds. There is no risk. Both products have unlimited protection, well, upto 2 million pounds.

I-LOV-MONEY

I know the minimum withdrawal is £500, but does that apply to deposits as well?

bogleboogle

Steve_xx said:

bogleboogle said:

Hi all,
What are the differences between the NS&I Direct Saver and the Income Bond account? Specifically, I don't really understand how the latter works. It has a yield of 1.16% which is higher than the Direct Saver's interest rate, but is the capital at risk? If not, what are the advantages of the Direct Saver over the Income Bond account? 
Thanks  

The difference in the main is that the Income Bond requires deposits or withdrawals of £500 or more. The interest on Income bonds is paid monthly out of the account, whereas the Direct Saver interest compounds. There is no risk. Both products have unlimited protection, well, upto 2 million pounds.

Thank you. Is the yield variable in the same way that the interest on the Direct Saver is, or does it potentially fluctuate more frequently/extremely due to market conditions? If the yield falls below a certain amount (e.g. <0%), will they give notice so you can withdraw the full amount of money deposited? 
Also, I assume the monthly payment would be 1.16% (yield) / 12? So for an initial deposit of £5000, you'd get a monthly yield payment of £4.83 (thus totalling £58 over 12 months)? 
Whereas for the Direct Saver, a £5000 initial deposit would receive an annual interest of £50? 

Steve_xx

The yield is variable on both accounts.  I understand that NSI generally give long notice of any rate change. See below for how interest is calculated:

(Annual Equivalent Rate) illustrates what the annual rate of interest would be if the interest was compounded each time it was paid. Where interest is paid annually, the quoted rate and the AER are the same.

colsten

bogleboogle said:

Steve_xx said:

bogleboogle said:

Hi all,
What are the differences between the NS&I Direct Saver and the Income Bond account? Specifically, I don't really understand how the latter works. It has a yield of 1.16% which is higher than the Direct Saver's interest rate, but is the capital at risk? If not, what are the advantages of the Direct Saver over the Income Bond account? 
Thanks  

The difference in the main is that the Income Bond requires deposits or withdrawals of £500 or more. The interest on Income bonds is paid monthly out of the account, whereas the Direct Saver interest compounds. There is no risk. Both products have unlimited protection, well, upto 2 million pounds.

Thank you. Is the yield variable in the same way that the interest on the Direct Saver is, or does it potentially fluctuate more frequently/extremely due to market conditions? If the yield falls below a certain amount (e.g. <0%), will they give notice so you can withdraw the full amount of money deposited? 
Also, I assume the monthly payment would be 1.16% (yield) / 12? So for an initial deposit of £5000, you'd get a monthly yield payment of £4.83 (thus totalling £58 over 12 months)? 
Whereas for the Direct Saver, a £5000 initial deposit would receive an annual interest of £50? 

Interest is calculated on the daily balance for all accounts. Balance * interest rate / 365. This then gets added up for the payment period. The payment period is the number of days in the previous month for the DS, and a year in the case of the IB. If you close either account, you will get any remaining interest earned up to the day of closure.

george4064

I-LOV-MONEY said:

I know the minimum withdrawal is £500, but does that apply to deposits as well?

Yes. Taken from the NS&I website for Income Bonds:

All your deposits must be at least £500 and from a UK bank account in your own name.

I-LOV-MONEY

Thanks George.  It doesn't look like they are interested in my fiver then !!

george4064

I-LOV-MONEY said:

Thanks George.  It doesn't look like they are interested in my fiver then !!

Haha. Yep, need to add a few zeros onto that 5!

Moxley

The TSB current account used to be listed as a top easy access savings account. I know the interest rate has dropped recently, but at 1.5% on the first £1.5k it's still better than the top saver on the article. Does anyone know why the TSB account is no longer listed? Criteria seem to be the same as it always was, but I may be missing something!

badger09

Moxley said:

The TSB current account used to be listed as a top easy access savings account. I know the interest rate has dropped recently, but at 1.5% on the first £1.5k it's still better than the top saver on the article. Does anyone know why the TSB account is no longer listed? Criteria seem to be the same as it always was, but I may be missing something!

Are you perhaps missing the fact that the TSB account you mention is a current account, rather than a savings account?
It is mentioned in that category

https://www.moneysavingexpert.com/banking/compare-best-bank-accounts/