Interest on savings

bluewhale_3

Can anyone tell me "Am I being conned"?

Dec 2007 I started a savings account with ICICI. To do so I was required to make an initial deposit and then set up a direct debit to facilitate monies being transferred from my Halifax current account to the ICICI savings account. This arrangement was to take place on the 1st of each month.

The mandate was not executed until the 7th January 2008 and the February transfer was made on the 5th February 2008.

Interest on the savings account is made on the last day of each month. ICICI advertise the interest rate at 6.41% per annum but if transfers take up to 7 days to take place, the interest rate appears to be much less. Despite a request for an explaination from ICICI I have had no response.

Should I ditch or am I being paronoid

Steve_xx

Interest oin the ICICI account is calculated daily and added at the start of the following month.

The interest rate is 6.41%. If it takes several days for the cash from your Halifax account to hit the ICICI account, then no interest is going to be earned during the period of transition. You say that the "interest rate appears to be much less". This is not so; the interest rate is 6.41%, but because of the time it takes for the cash to get from a to b you wont get as much interest as you would have gotten if the funds went from a and were received by b on the same day.

tradetime

I'm afraid my experience with ICICI is that they are not the most competent outfit, the opening process is lengthy at best, I opened 3 other accounts and funded them all after beginning the opening process with ICICI, I currently have money lounging in "clearing" for 2 days now, when they say it will be cleared within 1 day. Whilst I realise that it allegedly earns interest whilst in clearing, this is not the point. I expect them to perform as advertised, not just to dither along as they feel like.

Mikeyorks

bluewhale wrote: »

The mandate was not executed until the 7th January 2008 and the February transfer was made on the 5th February 2008.

Which is irrelevant to what you appear to be saying.

On what dates did the funds leave your Halifax account ... and on what dates are they credited to the receiving account .. is the 'interesting' aspect?

bluewhale_3

Thank you - It will appear then that I could be losing nearly a quarter of the interest rate of 6.41% over a 12 month period if ICICI take up to 7 days for the transfer.

bluewhale_3

The January transfer - Taken out on the 4th recorded on the 7th
The February transfer - Taken out and recorded on the 5th

In both cases AFTER the mandated date.

Steve_xx

bluewhale wrote: »

Thank you - It will appear then that I could be losing nearly a quarter of the interest rate of 6.41% over a 12 month period if ICICI take up to 7 days for the transfer.

No, that's not the case.

You only lose interest for the days that the cash is in transition. To lose a quarter of the 6.41% interest your cash would have to be in the transitional state for 3 months!

For example:

1. On Jan 1st I open an ICICI account with £0 in it
2. On Jan 1st I send £1000 from my Halifax accont to ICICI, interest rate 6.41%
3. The Halifax transfer does not reach my ICICI account until Apr 1st
4. On Jan 1st next year my interest on the ICICI account would be approximately £48.07, ie 9 months worth, instead of the £64.10 it would have earned had I had the £1000 in the ICICI account from Jan 1st.

ADC_3

I chose A&L. Over months I built up the account. Every month I got hundreds in interest. Over January I got up to £86,000 and was looking forward to the big interest payout on Feb 1st. It didn't arrive.

Reason (and I had to ring up to find this out) - I made a withdrawal of £2,000 to pay a tax bill. I reckon I lost £400 by doing this. I didn't know that no withdrawals were allowed.

I know what you're all thinking - I should have read the terms & conditions better but I'm posting this to warn others. The top rates look good but the conditions are tough.

I thought I was a clever money saver but I've wiped out all my savings of the last few months with this stupid error. Don't let it happen to you.

Steve_xx

I can understand how annoyed you must feel at this happening. Yes, you should have read the t&c's and you probably did at the start, but then a year later it's easy to forget the odd term or two.

Why don't you open an A&L e-saver account via Quidco? That'll earn you £20 in cashbacks.

Mikeyorks

bluewhale wrote: »

The February transfer - Taken out and recorded on the 5th .

So you can clearly see you're not

being conned

You haven't lost a penny in interest as the money, as should be the case with a DD, was deemed to be debited from Halifax and credited to ICICI same day!

bluewhale wrote: »

In both cases AFTER the mandated date.

Completely irrelevant to your original post. Suspect you've misunderstood the DD mandate day? If you want the money taken earlier then just ring them and change the DD date. It may be that ICICI don't have a 'collection' date on the 1st. Not all DD participants collect every day of the month - some just do it weekly .. so possibly the 5th is their closest day. In which case move it back a bit. But you're not losing interest on money in transition between accounts .. which is where you came in.

Dan29

From ICICI's FAQ:

It normally takes three to four working days to transfer funds between your HiSAVE Savings Account and your Current Account. The first funds transfer from your linked current account to your HiSAVE Account, however takes seven to eight working days.