Tembo HomeSaver Account 5.75% - advice/thoughts?

ToastLady

https://forums.moneysavingexpert.com/discussion/comment/82008000#Comment_82008000

EDITED 26/5/26 following dcs34's update after receiving info from Tembo AI and customer rep. The T's and C's are wrong and related to an older account. There are no penalties or forfeit of bonus for withdrawals. Please read dcs34's post at bottom of this page for further info.



I couldn't see it either in the account summary and thought I was going nuts as knew I had read it. I've just been checking on the very lengthy (48 page) pdf document that I downloaded and found it. Have copied and pasted the relevant part.

Withdrawals from your HomeSaver Account
10.23 In addition to the terms set out in Section 6 below, to qualify for the HomeSaver Bonus Rate, you must not make more than three (3) withdrawals from your HomeSaver Account within any 365-day period. If more than three (3) withdrawals are made within any 365-day period, you will forfeit the HomeSaver Bonus Rate that has accrued on the Account.

So am afraid that by the look of things if you had hoped for the extra 1% Homesaver Bonus Rate, you wouldn't be able to do what you wanted by withdrawing monthly. You would still be eligible for the 3% base rate and the 1.75% introductory rate though.
I don't know if the pdf document is available for general downloading from the website. I must have downloaded it when either applying for account or from within the app, I honestly can't remember.

Regarding the interest accrued, you don't have to skim that out, even if you have reached the max £20K in the account, the interest is allowed on top. I do know what you mean though, in that is the interest compounding? I really will have to leave that until tomorrow, or rather later today, but I will check and get back to you on that one.

pfpf

the "losing the bonus" is the mortgage part of it, just the % that you would be paid if you took out a mortgage via them.

i use mine as a 4.55% account and my OH has theirs at 4.75%. we each keep interest in the account.

edit, didn't see ToastLady's.

there is a referral bonus too if you know someone with an existing account. it's worth a minimum of £10 with a chance of up to £1000. its a long wait for the bonus with just a couple of terms to the offer.

ToastLady

https://forums.moneysavingexpert.com/discussion/comment/82008076#Comment_82008076

@dcs34
I can't see anything about not getting interest compounded, but there is a heck of a lot of blurb in the pdf to go through, and it contains info on other products too, not just the Homesaver.

I tried pasting pdf URL for you to have a look at it, but there is an error message coming up. Pasted it anyway to see if it works for you. https://acrobat.adobe.com/id/urn:aaid:sc:EU:da10e921-f565-488a-93b6-19fa5c7a2b33

Within the app it shows breakdown of interest paid and due.

Anyway what I did find was, and hope it helps.

https://help.tembomoney.com/en/articles/12541284-how-does-the-homesaver-interest-work

A breakdown of your interest rate

Your total rate is made up of three parts. This structure allows your money to work harder from day one, while providing extra "top-ups" for reaching key milestones.

• A Base Rate (Variable): This is the core interest earned on your balance every day. It is paid into your account on the 8th working day of the following month.
• An Introductory Rate (Fixed Bonus): This is a 12-month boost that you earn daily for the first year. It is paid out in a lump sum as long as you keep your account open for the full 12 months.
• A HomeSaver Bonus (Fixed Bonus): This extra boost is also earned daily during your first 12 months. It is paid out when you complete a qualifying mortgage or remortgage through Tembo Money Limited within three years of opening your account.
  
  
  
  
  

dcs34

https://forums.moneysavingexpert.com/discussion/comment/82008076#Comment_82008076

Thank you so much for your detailed response! That 10.23 clause seems a bit sneaky seeing as they don't mention the restriction on the product page, nor in the key summary page (which has a whole withdrawal and bonus T&C section) and is buried within a document that covers all sorts of accounts. I'll send them a message and see if they are enforcing that rule. 4.75% is still worth it for now but I could reinstate the bonus on the LISA account (since you can only have one Tembo account with a bonus operative).

Edit: in fact their product info page implies the complete opposite - "no penalties":

I'll also query whether the interest earns interest or if it is only the £20k balance that does (if so then it would be worth skimming off the monthly interest).

The_Groat_Counter

@dcs34 posted:

Also, does interest earned on this account accrue interest in following months? I.e. is it worth keeping the monthly interest in the account, or skimming it off each time?

Don't the vast majority of (if not all) savings accounts where the interest is paid back into the account result in compound interest?(Taking account of those where there's a maximum balance for earning interest, e.g. the Cahoot Sunny Day Saver at £3k.)

dcs34

https://forums.moneysavingexpert.com/discussion/comment/82008403#Comment_82008403

I guess really what I want to know is if I put £20k in, and that earns £X interest each month, does that interest itself earn interest (I'm assuming no since it is above the £20k max deposit) in which case it may be worth withdrawing the interest each month?

E.g. for the Santander Edge account I have funded it with £4k, and withdraw the interest each month since my understanding is that interest won't earn interest as it's over the £4k threshold.

The_Groat_Counter

https://forums.moneysavingexpert.com/discussion/comment/82008411#Comment_82008411

Aha, understood. Even after looking at the Key features document (linked to on the HomeSaver page) I'm not too sure what the answer is! That document states:

"The maximum balance for this account is £20,000, excluding interest."

I can't see any clear answer as to whether that earned interest would compound (i.e. whether the interest would itself earn interest).

EthicsGradient

https://forums.moneysavingexpert.com/discussion/comment/82008411#Comment_82008411

I believe interest above 20k does also earn interest. I've had mine open for nearly 2 months now. For March, I earned £12.96 - 8 days' interest on 20k. For April (30 days), I earned £48.68. If that had only been on the 20k, I think that would have been £48.65, but I got the 3p extra!!! which I think is the interest on the £12.96.

ToastLady

https://forums.moneysavingexpert.com/discussion/comment/82008392#Comment_82008392

Yes I think it's rather sneaky to put the info re "no more than 3 withdrawals" in that 48 page pdf and not have it within the summary box. It may well have come up when applying, as it would make more sense then that I would notice it, but I honestly can't remember now.
It doesn't make sense if they don't compound interest, as people would be skimming that off every month if they had put in the full £20K, and then automatically forfeit the 1% bonus for taking out a mortgage.
Please update us when you get a reply back from Tembo.

dcs34

Well I have now had the same response from Tembo's AI agent and a customer representative "A" (name withheld per MSE rules) which I think confirms both points - interest is paid on interest above £20k, and there is no loss of bonuses if >3 withdrawals are made in a year. I have copied and bolded for emphasis quotations of their responses:

Interest on Interest

AI Agent: Yes, interest paid into your account does earn further interest, even when your balance reaches £20,000. The base rate is calculated daily on your entire account balance and compounds, meaning interest earns interest. There's no benefit to withdrawing interest monthly to another account.

"A": Interest paid into your HomeSaver account does earn interest, even if your balance exceeds £20,000 due to accrued interest. The interest is calculated daily and paid monthly, and the combined balance (including interest due) is used for daily interest calculations. This means you do not need to withdraw monthly interest to earn interest on it; it will compound automatically within the account.

The 1% HomeSaver Bonus and Withdrawals

AI Agent: I understand your concern about the conflicting information. The 1% HomeSaver bonus is specifically a mortgage-related bonus that you only receive if you complete a qualifying mortgage through Tembo within 3 years of opening the account. This bonus accrues daily for the first 12 months but is only paid out upon mortgage completion. The withdrawal restrictions you've referenced in the terms and conditions appear to relate to different bonus structures. For your HomeSaver account, unlimited withdrawals are indeed permitted without affecting the mortgage bonus eligibility. Your current account shows a 5.75% AER, which includes the 3.00% base rate, 1.75% introductory bonus, and 1% mortgage bonus—all active until May 2027. However, given the conflicting information you've found between our product pages and the terms and conditions, I'd recommend a human agent review this with you to ensure complete clarity.

"A": There are no limitations on the number of withdrawals you can make from the HomeSaver account, and making withdrawals does not affect your eligibility for the bonus interest rate. The bonus is not forfeited based on the number of withdrawals; it is only forfeited if the account is closed before the end of the 365-day bonus period. The product information and support responses confirm "no penalties" for withdrawals, and the bonus rate is not reduced or lost due to withdrawal activity. If you take out a mortgage with Tembo, you will receive the additional bonus interest as described.

I have asked the customer rep if they can specifically check clause 10.23 of the T&Cs and confirm precisely in writing that this ">3 withdrawals" does not apply to HomeSaver account (their response implies it doesn't, but why would Tembo write it in their T&Cs…so if they aren't enforcing that restriction they should update the T&Cs?).