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Xil

First Direct Question

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First Direct's e-Saving account (currently paying 5% AER) has a clause on the interest payment:

"although no interest is paid on the full account balance in any month you make a withdrawal"

For those who already use one of these First Direct accounts, what do they mean by "any month"?

For example, if I withdrew my money on 1st March, am I only penalised one day's worth of interest?

If this is true, this clause must mean that a huge number of e-Saving accounts are regularly emptied at the beginning of the month.

What happens if I deposit money on the 15th February? Do I get two week's worth of interest paid that month or do I have to wait until a full calendar month has passed (without withdrawals) for interest to be paid?

Are they being sneaky or are they generally okay?

Xil.

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First Direct's e-Saving account (currently paying 5% AER) has a clause on the interest payment:

"although no interest is paid on the full account balance in any month you make a withdrawal"

For those who already use one of these First Direct accounts, what do they mean by "any month"?

For example, if I withdrew my money on 1st March, am I only penalised one day's worth of interest?

If this is true, this clause must mean that a huge number of e-Saving accounts are regularly emptied at the beginning of the month.

What happens if I deposit money on the 15th February? Do I get two week's worth of interest paid that month or do I have to wait until a full calendar month has passed (without withdrawals) for interest to be paid?

Are they being sneaky or are they generally okay?

Xil.

i take it to mean if you have £100,000 in there and with withdraw 1p you earn no interest at all for that calendar month

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i take it to mean if you have £100,000 in there and with withdraw 1p you earn no interest at all for that calendar month

Yes, that's basically what I mean.

I intend to put a few thousand in an account and not touch it. Some day in the future I will want to withdraw the whole lot in one go (because they drop the interest rate or I need the money). If I withdraw on the first day of the month, am I going to minimise my lost interest?

Or, are they going to screw me some other way?

Xil.

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I'm in a similar position and trust that the loss of a month's interest is not unavoidable.

I will e;mail them with the question, as the literature is not clear.

Obviously, this account is not one for regular use

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I'm in a similar position and trust that the loss of a month's interest is not unavoidable.

I will e;mail them with the question, as the literature is not clear.

Obviously, this account is not one for regular use

Thanks LiveWire, I would appreciate it if you post their reply here.

Xil.

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Sorry for the delay - been busy!

I rang first direct and it works like this.

From the day (any day) that the money is deposited, it earns interest.

However, no interest is paid on the entire account for any part of the month that ANY withdrawal is made.

This means that all withdrawals should be made in the first few days of any month.

I know this appears strange, but I suppose it allows them to post interest at a rate that assumes no loss, whereas most people will need to withdraw quite suddenly e.g. to buy a car and take the hit.

I stress, even a withdrawal of £10 from an account of £1000 will if made on the 30th of the month cost the interest for a whole month on the whole account.

Hence, not an account for regular withdrawals, but if you wish to keep a lumper for a year and can plan the removal , quite a good rate!

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Sorry for the delay - been busy!

I rang first direct and it works like this.

[snip]

....quite a good rate!

Brilliant! Thanks for taking the time to post back your findings. Sounds pretty much as we expected and okay for those who don't need their money at the end of the month.

I'm reasonably impressed with First Direct - they haven't attempted to hide this penalty (even though you have had to chase them for an explanation). Some of the best interest paying accounts are full of small print nasties.

I might be tempted to put another fiver in my account with them!!

Xil.

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I also opened an account with FirstDirect, then noticed this feature! (Its the same with HSBC's high interest accounts)

As a result simply opened a B&B account which pays 4.85% (and thats not an introductory rate) and theres no penalty to withdraw money.

You can also link the account to 3 other accounts, so I can put my money directly into ING should their rates beat B&B in future for example, and wont have to transfer into my current account first.

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I also opened an account with FirstDirect, then noticed this feature! (Its the same with HSBC's high interest accounts)

As a result simply opened a B&B account which pays 4.85% (and thats not an introductory rate) and theres no penalty to withdraw money.

You can also link the account to 3 other accounts, so I can put my money directly into ING should their rates beat B&B in future for example, and wont have to transfer into my current account first.

Thanks Pete95, I'll have a look at the B&B account. Could be useful to link more than one account to their savings account.

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Opened an account and closed it when i got my free 25 quid, didnt want to use it..... Currently with AandL, if you switch and open an online saver you get 5.15%, there isa is 5.20%, the interest on these drop by 0.9% and 0.7% in march 2007. Will look for a better place when the time comes..

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  • 301 Brexit, House prices and Summer 2020

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