Possibly the real reason why Tesco are ending the direct debit facility into their savings accounts
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Deleted_User wrote: »If someone is genuinely using the Tesco Internet Saver as a savings account, they are unaffected by the change except that (of they are making deposits by direct debit) they will have to change to standing order.
But if they do happen to have direct debits coming in, which the account does (did) allow from the start and that is why they partly opened it, they now can't do that in good faith. Changing to standing order means they aren't protected by the direct debit guarantee scheme. The customer becomes personally liable for a standing order not going through and not the organisation who set up the direct debit.0 -
Funding a savings account by direct debit when you don't have to would be pretty foolish. Funding by FP would get you 2 - 6 days (edit: 7 days worst case) more interest on every deposit you make.As a result, those who are genuinely using this account as a savings account are now being affected
It's therefore a great move for genuine (but not lazy) customers...since they'll make more money!0 -
I wonder how much a DD costs the organisation that pulls the money?
Probably there are different costs depending what the money is being pulled for but this was certainly costing Tesco money overall.0 -
YorkshireBoy wrote: »Funding a savings account by direct debit when you don't have to would be pretty foolish. Funding by FP would get you 2 - 6 days more interest on every deposit you make.
It's therefore a great move for genuine (but not lazy) customers...since they'll make more money!
I didn't say funding it, I said who use it as a proper savings account but may happen to have inward direct debits (it may be a payment from someone else who isn't the account holder).
A direct debit goes out and goes through the same as a FP does, so 'extra' interest would be negligible.0 -
fun4everyone wrote: »I wonder how much a DD costs the organisation that pulls the money?
Probably there are different costs depending what the money is being pulled for but this was certainly costing Tesco money overall.
Someone somewhere is shouldering the cost. That's what I was saying about the time and resources it takes to administrate these pointless direct debits.0 -
I didn't say funding it, I said who use it as a proper savings account but may happen to have inward direct debits (it may be a payment from someone else who isn't the account holder).
A direct debit goes out and goes through the same as a FP does, so 'extra' interest would be negligible.
An inward direct debit from a current account which is not a/the nominated account in the name of the IS account holder would not be accepted.0 -
But in the case of funding a Tesco savings account by DD, you're paying money to yourself (and had to declare that the DD was from a linked account in your name) so the guarantee scheme is irrelevant!But if they do happen to have direct debits coming in, which the account does (did) allow from the start and that is why they partly opened it, they now can't do that in good faith. Changing to standing order means they aren't protected by the direct debit guarantee scheme. The customer becomes personally liable for a standing order not going through and not the organisation who set up the direct debit.0 -
This lot here
https://fastpayltd.co.uk/direct-debit-solutions/pricing/
Are charging 10-50p per direct debit.
So Mr Partington who has 12 monthly dd's of £1 to satisfy all his rewards hunger is costing tesco between £1.20 to £6 per month. No doubt he snap transfers the £1s all back out again immediately so the whole thing is completely worthless to Tesco.
How many people were doing this? Since it was all over this website it must have been costing a fortune imo.0 -
You instruct your bank to send an FP to Tesco savings the day before Good Friday and it earns interest at Tesco from that day.A direct debit goes out and goes through the same as a FP does, so 'extra' interest would be negligible.
You instruct Tesco to pull funds from your current account via direct debit on the same day before Good Friday and the funds will start to earn interest at Tesco from the following Wednesday. Ergo you've lost 6 days interest. Make the Tesco request on Thursday evening, ie after their cut-off, and you're looking at the following Thursday, ie 7 days lost interest. I wouldn't call that "negligible". Indeed, it takes us back years to the 5% ING Direct savings accounts when you had to plan ridiculously far ahead at Easter and Xmas, let alone each and every weekend throughout the year.
Remember, we're talking about "genuine customers" here, not abusers.0 -
But in the case of funding a Tesco savings account by DD, you're paying money to yourself (and had to declare that the DD was from a linked account in your name) so the guarantee scheme is irrelevant!
But you're instructing your bank to authorise it, it's your bank who will take the money and send it to who it is going to. If something goes wrong, it's not always you who would be responsible.
In December, Telefonica didn't take my direct debit. They gave me a week to pay or face late payment charges. Little difficult as I was in the South China Sea with weak GPS. I didn't see the email straight away, and managed to get a strong enough connection to the day before it was due to pay by credit card. They said it was the bank, but when I got home I went into branch (they have their uses) and they said that it wasn't taken then returned, so it wasn't the bank's fault, it was Telefonica. If it was the bank, it would have been taken then returned as the bank would have stopped it. The bank confirmed that no attempt had been made to take it.0
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