Birmingham Midshires e-Saver Issue 2 - BEWARE

Dagobert

Birmingham Midshires' 6.5% e-Saver has been replaced by e-Saver Issue 2.

Unlike the e-Saver I opened a few weeks ago, Issue 2 only has a monthly interest option: gross 6.32%, AER 6.51%.

Everyone looks at the AER* and 6.5% looks great. AER illustrates what the interest rate would be if interest was paid and compounded once each year.

However, the interest will not be compounded, see T&Cs:

Interest is calculated daily and credited to your nominated account on the first day of each month. Interest can be paid away to your Linked Account or to another Birmingham Midshires Internet Savings Account. It cannot be paid back into your e-Saver (Issue 2).

This makes a complete nonsense of the AER. While this allows the account to be advertised with a table topping rate of 6.5%, it will only ever pay 6.3%.

In my view, this is a total con.

oldfella

I guess you could pay it to an e-saver Issue 1 - but no doubt the interest rate for Issue 1 will start dropping soon.

nicko33

The Overview and T&C seem to contradict each other

Overview:
Interest is variable and is calculated daily and credited to the account monthly on the anniversary of the first deposit.


If the T&C are correct, then there's nothing to stop you sending the interest straight back into the e-saver from your linked account. PITA though it may be, and losing x days of interest.

I have an outstanding application for the e-saver (1) which I sent off about 2 weeks ago. Wonder what they'll send back.

aleph_0

It's not really a big disaster, if we take the T&Cs as true, then you can transfer instantly to another BM account - so there might be a hack to transfer internally to BM then back to the e-saver within BM.

Also, was there really a need for multiple threads. People who were thinking of applying would read the thread regardless of whether beware is shouted?

Dagobert

aleph_0 wrote: »

Also, was there really a need for multiple threads.

Unfortunately, I had not noticed your earlier thread when I posted as I had loaded the savings forum prior to your posting.

aleph_0

Dagobert wrote: »

Unfortunately, I had not noticed your earlier thread when I posted as I had loaded the savings forum prior to your posting.

It's probably just me who obsessively refreshes the forum before posting.

oldfella

have opened an esaver 2 transferring the interest back to esaver 1 - no problem.

Dagobert

aleph_0 wrote:

It's probably just me who obsessively refreshes the forum before posting.

You wouldn't if you were on dial-up waiting 45 secs for a page to load. ;-)

We can request the threads to be merged. I was annoyed myself when I saw that I had needlessly added a thread.

Dagobert

oldfella wrote:

transferring the interest back to esaver 1 - no problem

Another quote from the general investment T&Cs:

If you transfer money from a Birmingham Midshires account to another Birmingham Midshires, interest is payable from the second banking day after we complete your instructions.

This is a joke. 2 days interest lost on internal transfers!

oldfella

second baking day after we complete your instructions.

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does it actually say that !

could be 2 weeks then ....

trashcan_2

I opened an account on 6.5%. Presumably this is issue One, but I am not sure, as i can't find anything on any of my correspondence . It just says Internet account- what issue have i got. No where on my login does it say either. Not that I can find.