Birmingham Midshires eSaver and 1yr fixed rate

converse

The BM eSaver is currently offering 6.5% gross (http://www.askbm.co.uk/savings/i/easy/product.asp?id=151)

and the 1 year fixed rate bond is 6.87%
(http://www.askbm.co.uk/savings/i/fixed/product.asp?id=149)

Are these good accounts, has anyone experience of them?

(I've narrowed it down to UK ones, using up Icelandic allowances already, don't have an ICICI account, read mixed reviews...)

I'm interested in both of the BM accounts above, want to put a fixed sum away for a year and more in an instant access account for when we move house.

Equally the eSaver, is it likely to stay a good rate, I don't want to put money in only to find it drops dramatically as they try and temp savers with yet another new account.

Any advice?

Darts

My esaver opened up no trouble at all and I find it quite easy to use.

I don't know if they are likely to slash rates though. If they do mess about, a possibility maybe Chelsea B/Soc who are offering 6.5% on a 90 day notice account, although I understand that the notice requirement will be lifted from July 2009.

Oblivion

converse wrote: »

Equally the eSaver, is it likely to stay a good rate, I don't want to put money in only to find it drops dramatically as they try and temp savers with yet another new account.

My guess would be that since this account does not appear to have any interest rate guarantees, there is every chance that once they have lured plenty of people in, they'll drop the rate significantly relying on the lethargy of customers to either not notice or not be bothered to move.

Dave.

Megalomaniac

That's what puts me off opening this account. I have Hisave with ICICI which I don't really like but the guarantee wis reassuring. No guarantee means when the bank has their targetted number of customer/amount saved with them, they can drop the rate to rates more typical of Halifax... just when this will happen, I expect sooner rather than later personally.

converse

Good points re the rate guarantee, I guess the fix rate bond would be the best bet from BM then?

Any other recommendations, one for easy access and one fixed rate, decent rates, but ones which won't plummet in a few months.

DonnySaver

Sorry, I posted this on another Birmingham Midshires thread, but wondered what people thought about this......

I just went onto the Birmingham Midshires site to apply for the 6.5% e-savings account. I was halfway through the application when I noticed that for deposits into the account from your linked bank account there would be a delay of 10 DAYS and for withdrawals it is 5 DAYS. :eek:

Have I got this correct? Does anyone else think that this is a little excessive? I exited the application at that point.

nrsql

Think for deposits it's the initial setup of the direct debit. It's a few days thereafter. When you make the deposit it tells you when the money will be withdrawn from the linked account and it it is credited an the same day which is quite good. Yo can leave the money in oyur bankc e-saver until the day of the transaction. Could also set up the account with £1 then transfer more in later.
You can also see on-line when the deposit is going to be transacted.

Haven't made any withdrwals yet.

Lady_in_Red

I also went on to register for their e-saver a/c and noted that they calculate their interest daily but only on the money invested in the account not on any interest earned (ie it is not compounded) and the interest is only added to the account yearly. Whereas Kaupthing Edge adds theirs monthly so surely you must end up with more money ????

isofa

Lady_in_Red wrote: »

I also went on to register for their e-saver a/c and noted that they calculate their interest daily but only on the money invested in the account not on any interest earned (ie it is not compounded) and the interest is only added to the account yearly. Whereas Kaupthing Edge adds theirs monthly so surely you must end up with more money ????

No, sadly not... because the monthly rates are lower to take this into consideration.

An account paying monthly interest has a lower rate than one paying annual interest, but both work out to the same AER (Annual Equivalent Rate), so you should end up with almost identical balances after 12 months. The AER rate is the one you should use to compare interest rates across the board, on any account.

E.g. an annual account might pay 5.25%, or the monthly option would be 5.12%, both work out to the same 5.25% AER rate over 12 months.

There was a detailed discussion on this several months ago, where some argued technically due to timings you may end up with a few extra pounds on a monthly option, but other's disagreed!

earlgrey_3

isofa wrote: »

There was a detailed discussion on this several months ago, where some argued technically due to timings you may end up with a few extra pounds on a monthly option, but other's disagreed!

If two accounts have the same AER but for one interest is paid monthly and the other annually you'll end up with the same only if your money is invested for exactly 12 months (or multiple thereof). But for any other period, i.e. 6 months or 18 months, then you'd normally be slightly better off with the annually paid interest due to the compounding effect - assuming wherever you moved it to paid the same rate.

The AER takes into account that the monthly rate compounds each month and assumes that the annual rate isn't compounded for 1 year - but if it's compounded earlier than a year due to closure then the AER you actually get is higher than stated.

equitydealer

BM is my top pick for savings at the moment

1) Part of HBOS (prefer this to Kaupthing). The UK Govt has set a precedent to protect UK banks after Northern Rock

2) 6.5% account was launched after at the last BOE rate cut

3) Unlikely to be any further BOE rate cuts until autumn because inflation is so high. BM unlikely to cut rates this year without a BOE rate cut

4) HBOS need liquidity so will be happy to draw in funds for the next few months using expensive retail deposits

Only small drawback is that interest is paid annually, but that's not a major problem for me.