Halifax Luring Me To New Accounts ...........

Steaminboot

Just received a letter from the Halifax saying that as i pay in more than £1K per Month into my acc that i'd be better moving to one of their new accounts.

" .... you will be better off changing to one of our new current accounts shown below and you could earn up to 60 times more interest than if you do nothing "

ULTIMATE REWARD ACCOUNT £800 worth of benefits for £10 p/m , interest rate of 6.17% AER on credit balances up to £2,500 and first £300 of agreed overdraft limit interest free. ( NO THANKS , run a mile from any charges )

HIGH INTEREST CURRENT ACCOUNT Gives 6.17% AER ( 6.00% gross p.a. ) interest on credit balances up to £2,500
After speaking to them on the phone ( the only way i could actually find out what interest rate my acc is paying now as theres no details on my statement or the website ! ) i found out that my current rate is 1.45% , so a massive difference. She said i would not loose out in any way by changing , overdraft , acc Number ,PIN , direct debits all stay the same.

Am i missing something here ?

Is there some nefarious reason they want me to change

Can anyone offer an insight ?

Meltdown_2

Steaminboot,
It rather depends on what your average balance is over the month, rather than how much you pay in.

The Ultimate Reward account is only of use if you are going to take advantage of the "benefits". Then you can ask yourself if they are worth £10 p.m. In many cases (most?), they aren't.

I did an analysis a few years back to see what the "tipping point" was between the two other accounts (High Interest and "Ordinary"). At that time, it was better financially to have the High Interest a/c if your average balance was less than about £5125, and the ordinary account if your average balance was more than that. With the two interest rates diverging since then, I've just repeated the exercise (back of an envelope style) and the tipping point seems to be about £13,300! (High Interest a/c better below this, ordinary a/c better above.)

It would not seem very 'money-saving' to keep such a high amount in a current account (better rates can be had in easy-access savings accounts, for example), so I would say that the High Interest a/c is likely to be the best option - but keeping the average balance in it just below the £2500 mark to ensure you get the 6.17% on all of it.

Steaminboot

Just the sort of well considered reply i was looking for Meltdown .:T

Thank you.

I'll be making the call tomorrow to change over to the High Interest Account.

YorkshireBoy

Al_Mac wrote: »

Meltdown is talking about all the money in one account. Have a linked websaver as well. So you can keep it topped up.

Better still, open a Sainsbury's Internet Saver @ 6.25% AER for any 'surplus' funds.

Transfers from Halifax=>Sainsburys are instant, and transfers from Sainsburys=>Halifax are next day.

millionaire_in_training

Does anyone know what the scenario would be if you are always in overdraft? I got the same letter but have £1k overdraft which I use every month as I am paying off higher interest debts. Any help appreciated.

pengers

Steaminboot,

I hope the Halifax ( or Bank of Scotland) told you that the High Interest account which you say you will join is about to have some changes. The interest will reduce from 6.17 on Jan 1st 2008 to 0.10%!! They are so helpful in explaining that they will do this to reflect the fact that they will no longer have the requirement to put £1000 pm into the account.

So while you have been advised to joint the High Interest account, my wife has been advised to move to a "better" account, probably one where they charge her £10 pm. Is it any wonder that customers are cynical? Unlike you, they deliberately fail to give any information about which account is better (asking her to call in to her branch).

I think I will ask them whether the name of the account (High Interest Current Account) will be liable to prosecution under the Trades Descriptions Act!

moozikgal

pengers wrote: »

Steaminboot,

I hope the Halifax ( or Bank of Scotland) told you that the High Interest account which you say you will join is about to have some changes. The interest will reduce from 6.17 on Jan 1st 2008 to 0.10%!! They are so helpful in explaining that they will do this to reflect the fact that they will no longer have the requirement to put £1000 pm into the account.

Hi pengers, where have you got this info from? The website still states £1000 monthly deposit at 6.17%...

I can't see them still being able to call it a "High Interest" account after January with sich a low interest rate!!

Shame if they do make this change, I quite like Halifax and it's local for me

Meltdown_2

I've had a look at the Halifax website (their Bank Accounts - current interest rates page), and the situation is that the "Ordinary" current account is the one that is having the changes from 1 Jan 2008.

It gives the current rates of 1.51% AER if you pay-in £1000 or more p.m., 0.1% AER if you pay-in less than that (both on balances of any amount), and then says that the rate "effective from 1/1/2008 regardless of amount of monthly credit" will be 0.10% AER.

(Incidentally, steaminboot, I don't know where the 1.45% you mentioned came from - no sign of it on this Halifax web page - which seems to have been unchanged for a couple of months at least.)

The details for the High Interest Current Account are what you would expect -
6.17% AER for "monthly credits totalling £1000 or more" on balances "up to & including £2500",
0.1% AER for "monthly credits totalling £1000 or more" on "balances over £2500" (meaning the excess over £2500), and
0.1% AER for "monthly credits totalling less than £1000" on balances of "any amount".
There is no appearance of the "rates effective from 1/1/2008 ..." message under the High Interest Current Account sections.

pengers

Meltdown,

Thanks for pointing out that it is the ordinary current account which has changes to interest rates. You are probably right. The following sentence of the letter my wife received made me think it was the High interest account which was being changed: "Since launching our High Interest Current Account last year, we have improved and extended our range of current accounts which means you could be better off moving to a different account with us" So since it also mentions the requirement to fund my wife's account with at least £1000 per month, I thought my wife's account must be the High Interest one but I'm not sure.

jem16

My son also got this letter advising him that since he was paying in more than £1k per month he would be better switching his current account.

He's a student and only earned over £1k per month in July, August and September when he was on a summer placement.

Perhaps they might have noticed this. :rolleyes:

northern_munky

I also had this letter and then a phone call asking me to go in and see one of their advisors. I got the hard sell for stocks and shares ISA's which I have since been told to avoid and then they tried to push me into the Ultimate Reward Account but I stuck to my guns and have switched to the High Interest Current Account. Apparently the normal Current Account I am in now will cease to be in January.