credit to Tucksy for post in other thread

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I nearly went for this but then checked the interest rates for the account on the Tesco website:


Amount investe____£1+____£3,000+___£5,000+___£15,000+___£50,000+
Annual gross______5.35%__5.55%_____5.75%_____6.25%______6.50%
AER_______________4.85%__5.05%_____5.25%_____5.75%______6.00%
Annual Net________3.88%__4.04%_____4.20%_____4.60%______4.80%

The gross rate includes the 1% bonus, i.e. the AER is 0.5% the gross due to the bonus period only being 6 months not 12.

So unfortunately, for most people this would be a 6.25% account.

I believe Scarborough BS do a 90 day notice savings account at 6.50% for a minimum balance of a grand, so this is nothing special.

Hang on, at the risk of looking stupid.........

As far as I understand, the 6.5% gross is 6.5% (rising to 6.75%) for the first six months, at which point you can take your money. Only if you leave it for another six months, during which the rate drops back 1% to 5.75% would you have an gross rate of 6.25%.

What I don't understand is Tesco's table of interest rates for annual/monthly interest payments.

http://www.tescofinance.com/personal/finan.../important.html

These rates appear to be without bonus. So why should there be any difference between the gross and the AER for the annual rates? i.e. for £15k - £49,999
And I would have thought the AER for monthly interest should be greater than the gross. But it appears to be more less than the gross above 15k and more than the gross less than 15k.

A quick back of the envelope calculation gives me 6.96% gross (including bonus) for the first 6 months if I calculate monthly interest for the equivalent 6.75% rate.

Still a bit confused. Can anyone clarify?

I spoke with Tesco CS directly and they advised that the rates listed on the OP HERE include the 1% bonus payable after 6 months but do not include the July 0.25% base rate increase which is effective from 15/8/07. These are 'interest paid annually' rates. I asked them specifically for an 'interest paid monthly' equivalent rate (including the 1% bonus & 0.25% increase) and was advised it would be equivalent to 6.60% on £50k+. After the bonus has been paid at 6 months, you are free to move your money elsewhere.

Clearly this account is fairly competitive if you have £50-100k and don't mind the possibility of having to move it again in 6 months. Hopefully in 6 months rates will have gone up another 0.25-0.5% and there'll be even greater rewards for instant access savers elsewhere!

Hope this helps...

every little helps

just phoned them regards the time it's taking to process the application

they say the postal strikes hit them hard (scotland) last week

but as long as they recieve the application by the 14th they will honour the bonus rate

They said that to me too and that they would take into account the date of posting. I sent my application 1st class recorded on 27th July and it had still not arrived as of last Friday - a week later!

The postal service is now on a par with everything else in this country...

Point for me is, if I open with a pound today, will I still get the bonus if I shift larger amounts later? Or do I have to put the lot in now? If not I'd be very happy for six months!

The other good thing about this account rather than the many others, is that you can open an account for a minor (under16) which is not that easy so it seems to me, with the other high interest accounts(over £10,000).

Yes you will still get the 1% bonus as long as the account is opened by 14th August. I imagine the bonus is calculated on the daily cleared balance over the 6 months.

My account was opened on 8th Aug with an initial opening balance of £50. I intend to transfer more into the account on the 15th Aug once the latest 0.25% increase is effected.

Once I have the correct amount in the account, I'll be taking interest monthly and effectively getting 6.60% over the 6 months, including the bonus at the end.

Call Tesco Savings on 08457 10 40 10 if you're still not sure. They seem to be very helpful...