Is the One account any good?

getmore4less

strongboes wrote: »

Seriously why are some posters so against the one account.

It is not acceptable to just compare your 2 year discounted rate and the one account rate. The one account is supposed to be for people who can overpay a large amount each month. Someone who gets paid weekly will benefit even more. It is not for people looking to pay their mortgage off in 10-15 years time, it is for someone who can blast it down in a much shorter time period. It has also been mentioned that it will change your spending habits for the better and allow stoozing. + you dont have to pay endless arrangement fees of £500++ every 2 years. Has anyone considered this in their slating of the account??

All valid points but you miss the point, the one account is not the best of breed when it comes to offsets, thats what people are highlighting.

bunking_off

To correct your terminology, "not the best of breed when it comes to current account mortgages". Most offsets (most, not all, e.g. Barclays is an exception) balance savings accounts with mortgage debt. That's not the same as balancing your day-to-day finances with mortgage debt as it implies conscious effort to move money out of current accounts into savings.

I don't disagree with your conclusion regards b-of-b, though, when viewed solely from an interest rate perspective.

However, for me "best of breed" goes far wider than that, and I would point in particular to the level of customer service...I can't comment on FD and Barclays, but I can say that the One Account truly is second-to-none (having been with them for 7 years & gone through a couple of house moves).

If I was taking a mortgage out today, I would certainly consider alternatives, but would also keep in mind that this is a more complex product than a simple mortgage where you set your direct debit up to pay it, & essentially forget about it thereafter. With a CAM it's your current account, and you need someone who you're comfortable with / doesn't feature weekly in the "please clean up the mess bank XYZ has made of my account Q&As" in the Sunday papers.

One point I would return to, though, at the risk of sounding like a broken record, is that the point of CAMs is the paradigm shift that one goes through. This is why I dislike CAMs being lumped in with offsets. For me, conventional offsets where the depiction continues to be of a mortgage debt offset by having £tens of thousands in savings just doesn't hit the spot. It leaves you with a picture of having savings, when in reality you're still in debt. I much prefer the view of having it "all-in-one" because it hits you in the face that you don't have savings per se, you're just "ahead of plan" and are still in debt. If you get that huge overdraft as the balance display at the cashpoint then all the better. That instills a discipline in finance which for me is far more material than the odd 0.4% difference in interest rate. I notice the Barclays one doesn't work like that, so it wouldn't be for me...but it could be fine for others. Saying that, I also notice that the One Account allows you to structure your account as savings vs mortgage on the on-line facility...bad move IMHO as it destroys that opportunity for paradigm shift.

happylife

I agree with bunking_off to an extent. Yes it is a shift in thinking and there is a debt to be cleared here.

I have 10K savings but 26K debt therefore I'm 16K in debt..

But I don't have to go begging to the bank should an emergency happen.

Overpaying my tracker mortgage was not worth the hassle if I needed some cash.

with the one account the money is available and can be acesssed easily. so yes I can lump it in with the mortage for now and forget about it, continue to pay my mortgage as normal and a bit extra.

If I never use the emergency money then great. I continue saving after the debt is cleared.

The One account gives me peace of mind, flexibility, great online banking...

But yes I'm still 16K in debt... :mad:

But only 39 so I have 25 years left hopefully of saving after my mortgage is paid..:T

Hobo_2

oops, too early talkin rubbish

MPwannasavemoney

_bankrupted wrote: »

MPwannasavemoney

So daily interest is a much cheaper method. You are only paying interest on the money you owe. In the case of the One Account, the interest is calculated over the month on the daily outstanding amount and THEN the interest is added at the end of the month. It is not compounding itself each day.

I wish you were right but I checked on this and they gave me the calculation, sure it is daily interest, but on the day after that first interest is calculated the interest is calculated on the interest. How else would the interest over the month by HIGHER than the equivalent % APR divided by 12?

MPwannasavemoney

strongboes wrote: »

Seriously why are some posters so against the one account.

It is not acceptable to just compare your 2 year discounted rate and the one account rate. The one account is supposed to be for people who can overpay a large amount each month. Someone who gets paid weekly will benefit even more. It is not for people looking to pay their mortgage off in 10-15 years time, it is for someone who can blast it down in a much shorter time period. It has also been mentioned that it will change your spending habits for the better and allow stoozing. + you dont have to pay endless arrangement fees of £500++ every 2 years. Has anyone considered this in their slating of the account??

When I opened the account I had lots of savings to offset - it worked well then. Circumstances (tax increases, council tax increases, energy increases, OH spending habits and kids etc) changed and the savings dwindled - then it didn't work!

MPwannasavemoney

Doh wrote: »

eh? explain...

What happens is they calculate interest daily.
On day one the interest is calculated on the balance outstanding for that day.
On day two the interest is calculated on the balance outstanding for that day plus the interest on the interest for the previous day.
etc
until they take the "accumulated" interest payment out of the account for the month.

getmore4less

MPwannasavemoney wrote: »

I wish you were right but I checked on this and they gave me the calculation, sure it is daily interest, but on the day after that first interest is calculated the interest is calculated on the interest. How else would the interest over the month by HIGHER than the equivalent % APR divided by 12?

Well that would mean something is wrong

APR/12 should give a higher monthly rate than the true monthly rate compounded to give the APR.

what calculation they have used may be complicated, and probably related to flat rate, you need to check the T&C's