The Top Easy Access Savings Discussion Area

DerrickFarnell

Hi

The current top clean savings account on the site is currently Birmingham Midshires, with an AER of 6.52%. However, I've noticed in the details that the interest must be paid into another account. Given that the AER rate is based on the assumption that interest is paid on previous interest, isn't the AER rate meaningess here, and therefore the status of this account as being the clean savings account with the highest AER a bit misleading? I don't know if whoever compiled the current list noticed this rule?

Derrick

d10

Just wondering if anyone has any experience of the capital one Bonus Saver (Issue 3) Account?
Would be grateful for your opinion.
Thanks

apt

The Birmingham Midshires rate is now down to 5.99%. Intelligent Finance down from 6.4% to 5.9%.

DerrickFarnell

DerrickFarnell wrote: »

Hi

The current top clean savings account on the site is currently Birmingham Midshires, with an AER of 6.52%. However, I've noticed in the details that the interest must be paid into another account. Given that the AER rate is based on the assumption that interest is paid on previous interest, isn't the AER rate meaningess here, and therefore the status of this account as being the clean savings account with the highest AER a bit misleading? I don't know if whoever compiled the current list noticed this rule?

Derrick

The same is true of the AA account, which is also listed on this site as being one of the top saving accounts, even though the interest cannot be paid into the same account, thereby making the AER rate meaningless. In fact, the information on this site states:

Unlike the above accounts, there is no penalty, however many withdrawals you make, and the interest gets paid straight into it.

And this rule was in place before the above the advice was added to the site.

Tibbledom

Just to warn everyone Bradford and Bingley have reduced interest rate on internet saver 3 from 6.51% AER to 6.01% AER from tomorrow (2/11/08). This account has now been withdrawn so we can expect the interest rate to go down in future months.

They have introduced a new account called e saver account (issue 6) with an interest rate of 6.1% (AER). This includes a 1% bonus for 12 months with minimum balance £1,000. So at some point there is a decision to make whether to transfer to the new account, or elsewhere. In 12 months time I am guessing the internet saver rate 3 rate will be at least 1% below the e saver (issue 6) rate (?)

I am assuming it will be possible to transfer directly as it was possible to transfer from internet saver 2 to internet saver 3 when internet saver 2 was withdrawn to new customers in the last sting! (3/11/08 update: it is possible to transfer by applying for a new esaver 6 account, you have to type in part of your existing account number and when it asks for linked account leave this blank and just press continue, the new account gets set up and then you can directly switch, takes about 24 hours for new account to appear, log in as usual).

The recent 0.5% cut in interest rates is now being implemented by a lot of savings providers. And the next Bank of England decision is not far off with a fall in bank base rate likely. So there will be a lot of changes in savings rates about.

Unfortunately we still need to keep a watch for accounts being made redundant and interest dropped because we have virtually no protection from the hopelessly weak banking code.

I am with the view that has been expressed in an earlier thread that it is better to go for accounts with introductory bonuses (e.g. Tesco and Nat West but watch out for the delay in the bonus starting for Nat West) as the so called clean accounts are more likely to drop their rates and introduce new accounts.

I wonder whether there should be a thread just to report changes in interest rates on accounts that have been top payers? I am new to MSE forums so perhaps there already is. Would make it easier to spot the changes.

Deeman_2

I wondered if anyone could give me a little advice.

My wife and around a dozen of her friends are looking to set up a savings account which they can all pay into with a regular monthly direct debit/transfer as they are saving up for a girlie weekend next year.

All of the savings accounts we have found so far only seem to allow payments form a linked current account, or from only one nominated bank account.

Any idea which bank/building society would allow payments to be received from multiple bank accounts ?

Obviously, we realise the account would need to be set up in a single name in the first instance.

Any help gratefully received.

JimmyTheWig

Deeman wrote: »

Any idea which bank/building society would allow payments to be received from multiple bank accounts ?

You can do this with an Egg savings account.
Money can be pulled in from Egg via a debit card in the name of the account holder but can also be paid in directly as a transfer from any bank - e.g. as a "bill payment" from any internet banking.

I don't work for Egg, but I do like the way they operate.
[BBC]I am sure that other accounts are available![/BBC]

Mr._H_2

Deeman wrote: »

Any idea which bank/building society would allow payments to be received from multiple bank accounts ?

You can do this with pretty much all accounts. It's a common misconception about the "one linked account" rule that most savings accounts have.

The one linked account means that you can only pay out of the savings account into one nominated account.

Usually, the online servicing facilities of savings accounts permit you to set up payments into them as well (usually via a direct debit instruction), and again these can only be set up with the one nominated account. However, there's nothing stopping you going to some other current account and initiating a transfer to the savings account from that end - all you need is the sort code, account number and, in some cases, reference number of the savings account in question.

djc1973

Why to some accounts like the AA, Birmingham Midshires etc insist the interest goes to another account?

Sorry if this is a daft question but I just want my interest adding and staying where it is?

newsaver76

Hi All,

I have a quick question I'm hoping someone could answer for me. I've been following the interest rates for savings account for quite a while and think I understand the basics of calculating interests, differences between Gross and AER rates , etc. etc.

However, I've seen an example tonight that baffles me - the current top rating savings account, from the AA, has an AER of 6.46%, but Gross of 6.28%. Now, I understand that the AER is usually higher than the Gross rate, mainly when interest is being paid monthly, as we (usually) get interest on interest for months 2 and later. Therefore, if the same initial deposit was left in the account from day 1 for a whole year, then the overall balance after this 1 year with monthly interest paid and gross rate, will be the same as the balance after 1 year if the AER rate was paid just once at the end of the year (annually).

However, in the AA case, although the interest is paid monthly, it is paid to a different account, NOT the savings account itself, therefore the balance on the savings account itself is constant throughout the year (assuming no additional withdrawals or deposits). Therefore, how could the AER be possibly be higher than the gross rate in this case? Surely, the AER = Gross in this case, and if the gross is quoted as 6.28%, then isn't the 6.46% AER rate simply not true and is just there so that the AA's account appears to be better than everyone else? (as people are told to use AER for comparisons)...?