Alliance and Leicester snag?

moneymaker99

Alliance and Leicester's e-saver account (6.5% including bonus for no withdrawals) is currently in the best-buy list. A year ago, I opened an A&L direct saver account, then a best buy. Interest on this account has now dropped to 6.0% - typical 'suck and slap' tactics. With a balance of ~£35,000, the net difference in annual interest between the two accounts would be about £120 - so well worth switching. BUT there is a penalty of one month's interest for withdrawals or closing the old account - about £140 net. Clever, aren't they?

(there may be a way around this - I think withdrawals are 'free' during July, for some reason, so note to self - remember to switch account in July).

Moneymaker99

Steve_xx

I think that the way around the problem is to draw all the money out at once at the start of the month. Then they can't sting you for a full months' interest.

charlieboycat

Steve_xx wrote: »

I think that the way around the problem is to draw all the money out at once at the start of the month. Then they can't sting you for a full months' interest.

Agreed. Problem is that sods law dictates that the month you want to withdraw begins on a Thursday, Friday or Saturday so that a weekend doubles the BACS loss-of-interest period from 2 to 4 calendar days. Did for me anyway when I closed my First Direct account some time ago - and would for the OP if he actioned it at the end of February. Probably still worth doing though ....

noh

moneymaker99 wrote: »

.........................

(there may be a way around this - I think withdrawals are 'free' during July, for some reason, so note to self - remember to switch account in July).

Moneymaker99

Yes there is. Withdraw your money from the Direct Saver on the 1st of a month and place it in the e-saver. That way you lose no interest.
Keep the direct saver open so that in future you are able to make withdrawals from them and only lose the interest differential between the two accounts, by withdrawing the entire balance on the 1st of a month and paying the remainder into the other account.

Nigel

tradetime

Interesting, I was unaware that banks could stipulate a no close never without penalty policy. I always was under the impression that most of them had a time period.
This comes from the current eSaver.

Free withdrawals in July. No interest is earned on the account balance for any other month in which a withdrawal is made. The AER will be lower if you withdraw.

Ergo close on the first of the month

Steve_xx

noh wrote: »

Yes there is. Withdraw your money from the Direct Saver on the 1st of a month and place it in the e-saver. That way you lose no interest.
Keep the direct saver open so that in future you are able to make withdrawals from them and only lose the interest differential between the two accounts, by withdrawing the entire balance on the 1st of a month and paying the remainder into the other account.

Nigel

Not as easy/simple as it sounds. Takes it approx 4 days to travel between Direct Saver and linked current account!!!

KTF

noh wrote: »

Yes there is. Withdraw your money from the Direct Saver on the 1st of a month and place it in the e-saver.

You cannot transfer directly from the Direct Saver to the e-Saver. It has to go via the linked bank account i.e. out of A&L then back in again.

I have a Direct Saver and am waiting till the first of March to roll round then will transfer the lot to the new Icelandic bank offering which has the same rate of interest as the e-Saver without the withdrawal penalty..

noh

Steve_xx wrote: »

Not as easy/simple as it sounds. Takes it approx 4 days to travel between Direct Saver and linked current account!!!

Not when I did it but my linked current account is a A+L Premier account. Transfer was instant between Direct Saver and linked Premier bank account. Then instant again from there to linked e-saver,

Nigel

Steve_xx

KTF wrote: »

You cannot transfer directly from the Direct Saver to the e-Saver. It has to go via the linked bank account i.e. out of A&L then back in again.

I have a Direct Saver and am waiting till the first of March to roll round then will transfer the lot to the new Icelandic bank offering which has the same rate of interest as the e-Saver without the withdrawal penalty..

That might prove a bit testing too. You shift it out of e-Saver on 1st March but it might not show in your linked account for about 4 days. Then you have to set it up from Icesave to grab it from the linked account (because you cannot send it to Icesave from your linked account)and that can take it a few days. Meanwhile, there's a huge loss of interest?

KTF

Yeah there is that aspect as well to consider. The other option is to wait till July as the Direct Saver is also offering free withdrawals then but I would have to crunch the numbers to see how much interest I would lose by keeping it there v transferring it out now and into a higher paying account

Steve_xx

noh wrote: »

Not when I did it but my linked current account is a A+L Premier account. Transfer was instant between Direct Saver and linked Premier bank account. Then instant again from there to linked e-saver,

Nigel

I see what you mean. I transferred cash on 2 Feb out of Direct Saver to linked account and although it showed it as being present immediately in the linked account, on the statement detail it shows:

Description column: transfer on 02 Feb
Date column: 04 Feb 08

I was worried about doing anything with it until it appeared on the statement roll. I think I once did something like this before and although it appeared to be in the linked account I seem to incur a charge for something.

Also, I reckon that A&L will only let you shift cash out of the account in portions of 10k per day.