Opening a second Tesco Internet Saver - question about bonus interest

refluxer

I opened a Tesco Internet Saver back in September which was paying 0.59%, comprising of their standard base rate of 0.1% plus a bonus rate of 0.49% for 12 months and I've just noticed they've launched a new version with a bonus of 0.59%, paying 0.69% in total.

From searching the forum, it doesn't sound like you can get the new rate applied to an existing account which means I'll have to open a new one and transfer the money across. I wouldn't normally mess about too much for such a modest increase, but I'm presuming this should be a simple procedure now that I'm already a customer, so it sounds like a no-brainer to get a better rate... or are there any pitfalls I've missed ?

My main question to anyone who has done something similar is about the interest - the standard rate interest is normally paid annually in March and bonus interest is paid at the end of the one-year bonus period (so Sept 2022 for me) but if I open a new account, transfer all the money over and then close the old one, will all of the interest (including bonus interest) be paid out on account closure ?

It does say in the summary box that "Interest will be earned at a daily rate and applied to your account annually and at account closure" so can I presume that that applies to both the base rate AND bonus rate interest payment, as it doesn't distinguish between them ?

I am likely to have to call them about this as it sounds like that's the only way to close an account, but I was just after a heads-up before going down this route.

Cheers.

ColdIron

refluxer said:

or are there any pitfalls I've missed ?

No, it's as obvious as it seems. I did it to extend the bonus rate maturity date but I live in hope that something better will come along before then

You can only close the account by phoning them. They will ask you where you want the residual interest paid. I usually specify the new Internet Saver. All the interest (standard and bonus) will be paid wherever you specify

Don't forget that you won't be able to withdraw from the new account for a few days after it was opened so you might want to hold off the closure until the new one is fully up and running

refluxer

ColdIron said:

refluxer said:

or are there any pitfalls I've missed ?

No, it's as obvious as it seems. I did it to extend the bonus rate maturity date but I live in hope that something better will come along before then

You can only close the account by phoning them. They will ask you where you want the residual interest paid. I usually specify the new Internet Saver. All the interest (standard and bonus) will be paid wherever you specify

Don't forget that you won't be able to withdraw from the new account for a few days after it was opened so you might want to hold off the closure until the new one is fully up and running

Perfect - just what I was after. Thanks !

where_are_we

Recently I opened a new Tesco IS paying .6% (previous one was .59%) and noticed a week ago that they now had a better one paying .61% and decided not to bother with it. Today`s .69% IS is worth bothering about! You get almost instant faster payments even at the weekend. Strange that the MSE top easy access account list does not mention it. Cold Iron`s point that you cannot access money for a few days on opening an IS is important. If you already have an IS, his advice to open the new IS with £1 and then wait a few business days before transferring money over, is relevant if you need money over those few days. So if you open a new IS tonight and transfer all old IS money immediately, you will not be able to get at your money until probably Wednesday.

deinoflex

I've closed accounts with them by emailing their closure form, see -

https://yourcommunity.tescobank.com/content/3382#ckb_start

where_are_we

Opening this new IS paying .69% is quick, if you already have a Tescobank online account. Most data is prefilled (and you do not have to click on T&C`s etc unlike Nationwide) and I had my account showing up online within 5 minutes ready for my first payment of £1 from my linked account.

refluxer

Thanks for the replies. I opening a new Tesco Internet Saver account this morning - the application took about 5 minutes and the account was available in online banking immediately, so I made a test payment of £1 from my current account which showed up straight away. 

This process must surely cause more hassle for Tesco than simply allowing a new interest rate and bonus period to be applied to an existing account - the end result would be exactly the same, but with less messing about for both Tesco and their banking customers.

ColdIron

It's always been this way. OTOH would you be happy if they applied rate reductions across the board? Of course they can't do this as the bonus is fixed. It's obviously been coded to treat the bonus as fixed in both directions and not cost effective to modify it. Changes to the standard rate are applied across the board

I'd welcome the ability to close the account(s) online with an instruction as to where to pay the residual interest

wiseonesomeofthetime

deinoflex said:

I've closed accounts with them by emailing their closure form, see -

https://yourcommunity.tescobank.com/content/3382#ckb_start

Emailed them yesterday to close the redundant three savers. Response said up to 30 days.

All three gone from app by this morning!

Impressive. 

where_are_we

deinoflex said:

I've closed accounts with them by emailing their closure form, see -

https://yourcommunity.tescobank.com/content/3382#ckb_start

Thanks. What spurred me into closing old IS accounts ( from the old days when they were good for DD`s), was Tesco saying that they might limit the number of Internet Savers you can have.

ColdIron

They do, it's 6 I believe