Egg Savings or Bradford & Bingley?

Shinds

Hi all,

Need some of your expertise please.

I have 15k that I would like to place in a high interest savings account.

Now do I go for the B&B @5.38% Gross - Interest paid monthly.

OR

Egg Savings - Which is @5.5% Gross for the first 6 months (and interest is only paid after the first 6 months)

Simply... where will I earn more interest?

Thanks

johnllew

I calculate that the B&B a/c will pay out £408.04 gross interest over 6 months with interest compounded monthly @ 5.38%. The Egg a/c will pay £412.50 gross at the end of 6 months @ 5.5%.

The figures will be different if you receive the interest taxed at 20% - £325.70 for the B&B and £330 for Egg.

So the Egg a/c looks slightly better and you can also get £5 cashback for opening the a/c through Rpoints (see the link below to my referrer's post).

Shinds

Cool - Thanks John!

Dagobert

Another interesting point:

The Bradford & Bingley account is totally inflexible as far as the pay-in methods are concernced: you can only transfer money via Direct Debit from an associated current account.

Say you have your savings with Bank A andyour current account with Bank B, you first need to transfer your money from A to B and from there to B&B. While the money is being transferred - 3 to 5 banking days per transfer - your money isn't gaining any interest.

For those who want to invest a greater sum of money, it is also worth noting that you, for the same reason, cannot make a CHAPS (instant) payment into the B&B account.

A CHAPS transfer typically costs £25 but consider the following example:

Investment £100,000 @ 5.5%, BACS transfer taking 4 days will cost

100,000 * 5.5 / 100 / 360 * 4 = £61
A CHAPS transfer would save you £36.

The break-even point at 5.5% interest is £40,909. Any greater sum is best transferred via CHAPS.

Even for smaller sums it is always worth calculating whether it is worth shifting your money for a small interest gain of, say, 0.1%. The answer is: it depends on how long the money will stay in the new account.

Conclusion: the Egg savings account, which allows transfers from and to any account via BACS or CHAPS is the better option.

Shinds

Dagobert - That's a very good point.

My problem has been that B&B have taken nearly 2 weeks to actually setup and open the account

Shinds

Robert = I've got an Egg one going as well.! ;D

PeterPauper

Think I'd go for Egg too. Not cos I have one you understand, its just that I have v recently opened the B&B Esavings account. Well, eventually I did!

B&B lost my cheque with the application form I sent which meant the money I had in a current account sat there for nearly 2 weeks earning v little interest. Once I'd cancelled the 'lost' cheque with Alliance & Letter, A&L sent me a letter saying that, on this occassion, they would waiver the £10 charge!

Gee thanks!

It doesnt bode well for my confidence in B&B but they cant be worse than British Gas........but thats another story!!

So Egg it is then.

Peter

mephisto_2

Hi all,

Need some of your expertise please.

I have 15k that I would like to place in a high interest savings account.

Now do I go for the B&B @5.38% Gross - Interest paid monthly.

OR

Egg Savings - Which is @5.5% Gross for the first 6 months (and interest is only paid after the first 6 months)

Simply... where will I earn more interest?

Thanks

I read on the website that interest can be paid monthly? Am i misreading something?

Shinds

mephisto, If you're talking about the Egg Savings account than no you can't have the Interest paid monthly on this special 5.5% account. You can however turn it into a normal Egg Savings account after a year.

This was what I was told by Egg Customer Services.

Debt_Free_Chick

Another interesting point:

The Bradford & Bingley account is totally inflexible as far as the pay-in methods are concernced: you can only transfer money via Direct Debit from an associated current account.

Say you have your savings with Bank A andyour current account with Bank B, you first need to transfer your money from A to B and from there to B&B. While the money is being transferred - 3 to 5 banking days per transfer - your money isn't gaining any interest.

But you can link up to three different accounts. So, in your example, you could link Bank A & Bank B to your B&B account and transfer from either.

HTH

yetty_2

I too have been looking closely at Egg and B&B.

The helpful B&B eSavings customer adviser informs me that:
a) the OPENING payment can also be made by CHEQUE. This isn’t so bad because the account earns interest on the FULL cheque value the very NEXT DAY after they receive the paper cheque. Payments in thereafter only by direct debit.
b) CHAPS withdrawals are okay, at a relatively reasonable cost £20.


Earlier, Dagobert said, “.. Conclusion: the Egg savings account, which allows transfers from and to any account via BACS or CHAPS is the better option. ..” IMHO I don’t agree, at least from a security view point. Surely the fewer accounts that allow ‘any account transfers out’ is the better!! I agree flexibility is useful where numerous transactions occur (i.e. current accounts) but not if it is for parking savings for multiple months or more. I'll sleep better...

Finally can anyone explain why the AER rates differ i.e. Egg 5.12% AER and the B&B 5.38% AER ?

Comments welcomed!!

Rgds., Yetty