Birmingham Midshires e-Saver Issue 2 - BEWARE

gelato_cat

Thanks - that's given me a bit to think about!

I guess I'm comparing my BM bond with my six-month fixes at Icesave. BM beats them marginally (and I had decided I didn't want to give the Icelandics too much more cash just in case).

I'm also comparing both fixes with the 6.5% e-Saver and, again, they still seem to be better.

Suze

Dagobert wrote: »

It depends on what you are comparing:

If you look at two 6-month investments paying interest once at the end of the term, it does not matter whether you look at AER or gross rate.

If you look at two 6-month investments one of which pays monthly and compounds, the other just once, you need to compare AER.

If you compare a 6-month bond to a 9-month bond it is difficult to make a meaningful comparison unless you have a crystal ball to know what will be offered in 6 months.

If you are comparing two easy access accounts and plan to withdraw before the year is up, one pays monthly, the other annually, both with the same AER, then the AER comparison will be meaningless; the money in the monthly account has no chance to compound for a year and therefore gives you less interest.

You can only compare gross figures if the compounding terms are the same. If they aren't and if you don't look at a whole year you need to calculate case by case.

KeithEssex_2

oldfella wrote: »

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

Same here - wonder how long until the rate on esaver drops though ? I only opened it 4 weeks ago ...

This reminds me of the Halifax

Presumably BM does wants our money on deposit ? If we pay away the interest to another Bank - how does that help them exactly ?

The only logic that I can see that explains such a restriction is to try to get most people to transfer their interest into a lower paying savings account with BM .... on that basis I think you can safely assume that the rate on the original account will indeed drop shortly.

oldfella

You're not hedging the £35k limit as both are with the same Institution .... what am I missing?

---

BM are like A&L well known for introducing new versions and dropping the rate of previous issues. Version 1 will shortly be paying less than version 2. As KeithEssex says it makes no sense to introduce an account which forces you to pay the interest away, but lets you pay it to version 1, which has the same interest rate as version 2.

This way we can pay it to version 1, then transfer it back to version 2, just loosing a little interest on the way.

flobbalob

trashcan wrote: »

It took me a while to find Issue 1's interest rates, still 6.5% but now that they are tucked away in the closed accounts page, the rate will drop without us noticing.
Banks should do what Virgin does and write and tell you when the rate goes up or down.

The current interest rate is displayed when you log into your account

sloughflint

When people use the DD pulling in method rather than BACS with this account, does the transfer show simultaneously in both accounts?
My BM balance has increased today but funds are still sitting in my linked account.
Do I have a problem?
BACS transfers worked fine.

Dagobert

sloughflint wrote: »

When people use the DD pulling in method rather than BACS with this account, does the transfer show simultaneously in both accounts?
My BM balance has increased today but funds are still sitting in my linked account.

When using DD to fund another savings account you will sometimes find that the funds are credited to account A a day before being taken from account B.

isofa

Sounds like a complete hassle, and this rate game and messing with non-compounding has completely put me off BM.

isofa

trashcan wrote: »

Banks should do what Virgin does and write and tell you when the rate goes up or down.

Nearly all mine do. The fabled Northern Rock, C+G and many others besides.

sloughflint

Dagobert wrote: »

When using DD to fund another savings account you will sometimes find that the funds are credited to account A a day before being taken from account B.

Thanks. I'll wait 24 hours then before doing anything drastic like cancelling the DD and just BACSing.

Mikeyorks

sloughflint wrote: »

When people use the DD pulling in method rather than BACS with this account, does the transfer show simultaneously in both accounts?
My BM balance has increased today but funds are still sitting in my linked account.

As Dagobert correctly says .. no problem. Mine tend to debit the source account one day and credit BM next day.

Albeit I do find it odd that a DD credited to BM 30/5 is still showing as 'uncleared' funds! According to their T&Cs it should 'clear' the 4th working day after date of deposit ... which is today. But I assume it has to go via tonight's Batch run first in order to prevent me drawing on it today?

Very odd system ... find it really helpful how financial Institutions all work the same way!