HSBC current account customer? You can now get 3% ‘easy-access’ on your savings

Sensory

phillw said:

Sensory said:
Al Rayan's 2.81% is gross p.a. which is 2.8465% AER.

10000 x (1 + (0.0281 / 12))^12 = 10284.65

I thought al rayan was 2.81 apr, not gross..

So yeah, its even closer than I thought

https://www.alrayanbank.co.uk/guide-expected-profit
“Al Rayan Bank does not quote AER (annual equivalent rate) on its products as this may be misinterpreted by consumers as an interest-based calculation. Therefore, to avoid any confusion for our customers, the rate of annual return from Al Rayan Bank savings products is only ever quoted as expected profit rate (EPR).“

https://www.alrayanbank.co.uk/savings/everyday-saver-issue-3

Summary Box

“If on account opening you deposited £5,000 into your Everyday Saver (Issue 3) and made no further deposits or withdrawals, the estimated balance on the first anniversary of your account opening would be £5,142.32”


So despite their intentions, the result is exactly an interest-based calculation, and their 2.81% quoted alongside other AER figures in comparison tables is actually underselling them.

phillw

Sensory said:
So despite their intentions, the result is exactly an interest-based calculation, and their 2.81% quoted alongside other AER figures in comparison tables is actually underselling them.

I wonder if its because they don't want to predict what the profit will be in a year.

These are probably the worst combination of accounts to compare with al rayan underselling and HSBC overselling (if you deposit £10000).

The hsbc account would fair slightly better if you didn't fully fund it.

Sensory

phillw said:

Sensory said:
So despite their intentions, the result is exactly an interest-based calculation, and their 2.81% quoted alongside other AER figures in comparison tables is actually underselling them.

I wonder if its because they don't want to predict what the profit will be in a year.

These are probably the worst combination of accounts to compare with al rayan underselling and HSBC overselling (if you deposit £10000).

The hsbc account would fair slightly better if you didn't fully fund it.

The difference is 0.15%, whether gross p.a. or AER. It’s only worse than that for HSBC if the balance ever goes above 10K.

Gatehouse quotes different gross p.a. and AER figures (when monthly) despite also paying expected profit instead of interest. Al Rayan could simply quote AER figures considering the profit calculation in their summary box illustration, but they simply do not.

griffinsaver26

Do you need to withdraw the whole balance on 1st month then re deposit what you don’t need straight back to avoid losing interest or withdraw any amount on 1st month? 

I don’t really understand 1st month thing! 

Sensory

griffinsaver26 said:

Do you need to withdraw the whole balance on 1st month then re deposit what you don’t need straight back to avoid losing interest or withdraw any amount on 1st month? 

I don’t really understand 1st month thing! 

Interest is calculated daily and credited to the account monthly.

The standard rate of interest is paid in any month where a withdrawal is made or you close your account.

The interest rate including bonus is paid in any month where you don't make a withdrawal or don't close your account.

If you withdraw the whole balance on the 1st of a calendar month, you effectively lose no interest, as interest on £0.00 is nothing regardless of the rate. If you wish to continue using the account, wait until the 1st of the next month before making a further deposit, and in the interim you can park any remaining money in the next-best easy access account you have.

Descrabled

The most efficient way to operate the bonus account is never to withdraw from the account excepting to withdraw the whole balance on the first day of the month.

Having made a withdrawal then do not add further funds until that month has ended.

So if you need any of the money from the account in November then withdraw all of the balance in the account on 1st November. Do not return any funds to the account before 1st of December.

griffinsaver26

Descrabled said:

The most efficient way to operate the bonus account is never to withdraw from the account excepting to withdraw the whole balance on the first day of the month.

Having made a withdrawal then do not add further funds until that month has ended.

So if you need any of the money from the account in November then withdraw all of the balance in the account on 1st November. Do not return any funds to the account before 1st of December.

Got it! Thank you 😊 

cricidmuslibale

Tbh I would rather like to find out (in a few weeks time) the average interest rate HSBC will now be paying out on this account; it would give some idea of roughly how many of the likely many savers that make use of it are actually able to stick to not withdrawing more often than not, and thus earn 2.96% monthly interest rather than the much lower 0.5% instead!

Descrabled

January

If I need cash from my bonus account during January the earliest I can transfer money to an alternative savings account is Tuesday 2nd.

On £10k this will mean a loss of £1.69 me thinks. I'll deduct that from the grandchildren's allowances to balance the books.

Edit. It's Tuesday 3rd of January of course. 2 days at 0.5%

Daliah

Descrabled said:

January

If I need cash from my bonus account during January the earliest I can transfer money to an alternative savings account is Tuesday 2nd.

On £10k this will mean a loss of £1.69 me thinks. I'll deduct that from the grandchildren's allowances to balance the books.

Edit. It's Tuesday 3rd of January of course. 2 days at 0.5%

AFAIK, internal transfers are instant 24x7x365. As are Faster Payments out of your HSBC current account. So instant withdrawals at any time are possible (although only sensible on a 1st).