Northern Rock,new account.

ANGLICANPAT

Hi folks
couple of points. Ive been looking for the 'rub' with this account. Regarding the Gov guarantee.With the 6.9% with access looking too good to be workable from Rocks recovery point of view could it be that the wording enables only the capital to be safe. In other words, if atthe end of the years bond NR goes under again or whatever, you dont get any interest perhaps,just your money back? Also, it says you can get your money out anytime, but if theres problems like before , dont think theres any promises of getting it out in any timescale, is there? If things bomb out, could you end up with the your capital safe, but no interest, and you 'waiting' months for your safe money to be released, losing more interest all the time ? Maybe the Gov could get away with that , depending on the interpretation of their promises?

Savings_Dave

frivolous_fay wrote: »

Opened my account in branch today.

While I was there, a member of staff told a customer that she thought the account would remain available until the BoE announce the interest rates.

May be nonsense, may be not.

If that's true then the account will remain open upto February 6-7th (the next BOE meeting for Interest Rates is on the 7th).

I'm assuming another issue (#2) of this bond will shortly be released and obviously at a lower AER as rates are expected to be cut by at least 0.25% on the Thursday.

Of course I'm only assuming here - nothing concrete of course

Looks like I'll make it then

ANGLICANPAT

Maybe in view of the above possibility it would be bettter to go for interest payment each month as the aer is the same ?

RayWolfe

No, you will still get the current rate, calculated each day, until the rate changes.

ANGLICANPAT

Thanks Ray Wolfe, I posted the question in answer to my earlier post, but someone else posted inbetween, so I was suggesting monthly interest in relation to the possibility of the Govt agreement not covering interest , not in relation to any new issues. See a couple of posts back.

Beate

The thing is that the annual interest can either be added to the bond or transferred to another Northern Rock or nominated bank account. The monthly interest cannot be added to the bond, so doesn't that mean that the interest does not get compounded the way it does with the annual one, as the interest money gets transferred out and therefore does not count towards the total when calculating next month?

ANGLICANPAT

Yes Beate, Im just trying to say if there could be a risk that ONLY your capital is covered, maybe its better to grab the interest at the earliest time you can in case Rock goes down. (Yes into another acc or whatever)

Beate

That's fine, I do get your point, I just wanted to make sure I had understood that interest business myself.

Beate

Savings_Dave wrote: »

If that's true then the account will remain open upto February 6-7th (the next BOE meeting for Interest Rates is on the 7th).

I'm assuming another issue (#2) of this bond will shortly be released and obviously at a lower AER as rates are expected to be cut by at least 0.25% on the Thursday.

Of course I'm only assuming here - nothing concrete of course

Looks like I'll make it then

Savings Dave, in case you plan to empty your A&L Direct Saver totally, I was told if I did that by internet banking, I had to leave a £1 in and call them to request the account to be closed and the £1 and any remaining interest to be transferred, so I guess I will use telephone banking for the whole transaction. Do you know whether a transaction from Direct Saver to Premier Direct Current Account is instant so that I could immediately ask them to transfer the money over to Northern Rock? If it's not it means I would have to wait until Monday to transfer to Northern Rock. Which should still leave enough time, I don't think the bond will close that quickly, to be honest.

Steve_xx

ANGLICANPAT wrote: »

Yes Beate, Im just trying to say if there could be a risk that ONLY your capital is covered, maybe its better to grab the interest at the earliest time you can in case Rock goes down. (Yes into another acc or whatever)

The UK goverment is guaranteeing 100% of all deposits in any Northern Rock account. It has not given detail of when that guarantee will end. When it does end, only the first 35k will be guaranteed 100%.

As interest is accrued on a daily basis, though not necessarily added to the account on a daily basis, then interest too is covered by the guarantee.