Igloo Energy - 3% Interest on Positive Balances

Jonbvn

I just noticed that our account with Igloo energy pays 3% on positive balances. Previously, we just paid by regular direct debit and did not take much notice.
Given the low interest rates available on savings account, we have made just 2 additional payments into this account of £500 total, which have been accepted. I guess there will be some ceiling on how much you can pay into the account, but in the meantime, it is something worth considering.

[Deleted User]

I know OVO and possibly other suppliers offer this too. Is the money protected though if they go bust? 

brewerdave

Jonbvn said:

I just noticed that our account with Igloo energy pays 3% on positive balances. Previously, we just paid by regular direct debit and did not take much notice.
Given the low interest rates available on savings account, we have made just 2 additional payments into this account of £500 total, which have been accepted. I guess there will be some ceiling on how much you can pay into the account, but in the meantime, it is something worth considering.

What SHOULD happen is that when they review your payments/balance on a regular basis (as they should), they either pay you back the excess credit or reduce your monthly DD. However, as many of the suppliers appear to be cash poor and are operating on a positive cash flow basis, Igloo may hang on to your money - if too many people use Igloo as a bank then wait for the BANG!!

UnclaimedEnergy

"The credit balance of your account, up to £1000, will earn a 3% interest p.a. reward on a daily basis. Then, every month, any reward you’ve earned is added to your balance when we generate your statement."

The way Igloo do it is that they'll add it onto your credit balance every month. Meaning that if they do go bust, your credit balance will most likely be guaranteed by the supplier which takes on the customers. (It always has done so far).

The only thing you'd lose out on is the 3% from the month they went bust.

Jonbvn

UnclaimedEnergy said:

"The credit balance of your account, up to £1000, will earn a 3% interest p.a. reward on a daily basis. Then, every month, any reward you’ve earned is added to your balance when we generate your statement."

The way Igloo do it is that they'll add it onto your credit balance every month. Meaning that if they do go bust, your credit balance will most likely be guaranteed by the supplier which takes on the customers. (It always has done so far).

The only thing you'd lose out on is the 3% from the month they went bust.

Given that the maximum we can potentially put at risk, the upside benefits seem to outweigh the potential downside losses. Of course, if it was uncapped we would not remortgage to put the money into Igloo :0

BTW, I have just increased our DD to try and take advantage of this.

[Deleted User]

Our OVO Interest Rewards* are just our way of thanking you for your loyalty. And for keeping your account in credit too. You'll start with a 3% reward in your first year, before we increase it to 4% in year two, and 5% the following year. Essentially, the longer you stay with us, the more we'll say thanks. 

So that's:

• 3% in your first year with us.
• 4% in your second year. 
• And 5% in your third year, and every year after. 

I just had a look at OVO again as they offer the same, if you have money spare to do so this would be pretty good.

The maximum credit balance this will be applied to is £1000.

I wonder if this work out cheaper than some of the cheaper energy deals?

UnclaimedEnergy

3% interest on 1,000 is £30, however OVO's cheapest tariff is about £150 more expensive than the cheapest on the market.

[Deleted User]

UnclaimedEnergy said:

3% interest on 1,000 is £30, however OVO's cheapest tariff is about £150 more expensive than the cheapest on the market.

Well that’s that answered 🤣 thanks.

[Deleted User]

After the failure of Eversmart (which ran a 12 month pay-in-advance scheme), I had hoped that Ofgem was going to put a stop to these credit-building (cashflow) schemes given which, in the event of a supplier going bust, leaves all consumers picking up the tab. This is what CA said late last year:

Gillian Guy, Chief Executive of Citizens Advice, said:

“Households are picking up an ever-increasing bill as more suppliers go to the wall. If other suppliers fail in the future that bill is likely to keep rising. 

“Ofgem has proposed measures to limit the costs to consumers, but more action is needed. The next government should legislate to compel suppliers to make industry payments – in particular the Renewables Obligation (RO) – more regularly. This would stop suppliers from building up such high levels of debt and stop consumers from being the ones to foot the bill.”

Jonbvn

UnclaimedEnergy said:

3% interest on 1,000 is £30, however OVO's cheapest tariff is about £150 more expensive than the cheapest on the market.

MSE's Cheap Energy Club reckons Igloo is currently our cheapest supplier. 

Talldave

Jonbvn said:

MSE's Cheap Energy Club reckons Igloo is currently our cheapest supplier. 

It might be worth double checking on a comparison site that includes all suppliers. And if you're on a dual fuel tariff,  check separate suppliers too.