Get 6% on your savings!

[Comedy of Errors]

From 1st March the Halifax will be launching a new account which pays an amazing 6% interest. That is far ahead of anything else on the market.

They also claim it is not "loss leader" account where the rates will drop after a few months.

It's a regular saving account, not a lump sum one. Here is how it works:

* You must set up a standing order to pay a fixed amount in each month between £25 - £250
* You must carry on paying for 1 year without missing any payments
* You can not take any money out during the year
* At the end of the year it will switch to an instant access account so that you can get at the money.
* Each customer can only take out 1 policy each year.

It is not showing on the Halifax site yet as far as I can see. This info comes from the Guardian.

EDIT: One other fact I just noticed:
* The interst rate is FIXED at 6% for the year

[Squattie]

Looks good.

I have a couple of thousand that I was planning on putting into an ISA but this looks like it may be a better option.

Thanks for the heads up..

[Coolio]

nice one, having a nightmare with ING, this may be the better option

[Rhino]

There's an article about this in the Telegraph today.
Because you have to put your money in monthly and not as a lump sum, although the headline rate is 6%, the interest received is lower than it would be on a lump sum deposit.

They reckon it works out at 4.8 pc net for basic taxpayers.

The maximum monthly payment is £250 which totals £3,000 over the year. If you could pay this in as a lump you would earn approx £180 in interest for the year. However, becauser the payments are made monthly and the balance is transferred to another account at the end of the year you only earn £98 interest.

Nice of the bank to point out this difference, oh wait they didn't

[Flimber]

Originally posted by Rhino
...

Nice of the bank to point out this difference, oh wait they didn't

What were the chances of that happening, eh ? :D

Mike.

[Comedy of Errors]

Originally posted by Rhino
There's an article about this in the Telegraph today....
They reckon it works out at 4.8 pc net for basic taxpayers.


I think the Telegraph may be being a bit harsh. It is not a lump sum investment, it is a regular savings plan.

If instead of trying to turn it into a lum sum investment you view it as a savings plan skimming off money from your monthly wage packet then it is well worth it, particularly if you have used up your cash ISA allowance for the year.

[lindis]

...and is there anyone who has used up their ISA allowance ....I was under the impression forum members spend spend spend!....or is that just me?

[DVDKEV]

I agree with Comedy of Errors, it is still 6%pa interest on each monthly payment albeit if they drop the rate after several months one might argue they should be quoting a monthly rate. Still, all banks quote interest annually irrespective of the fact that the rates are subject to fluctuation so it is fair to state 6% pa in line with the other banks, surely.

[Mr Silly]

Originally posted by Coolio
nice one, having a nightmare with ING, this may be the better option Whats the problem with ING?

[pwray]

Originally posted by Coolio
nice one, having a nightmare with ING, this may be the better option

Coolio, I was thinking of depositing some dosh with ING - is there a reason I shouldn't? :eek:

[owens2000]

Originally posted by pwray
Coolio, I was thinking of depositing some dosh with ING - is there a reason I shouldn't? :eek:

My wife and I have both opened ING accounts recently and we haven't had any problems. In fact, from the 4 internet based bank/savings accounts I access, I would say it's the simplest one to use and was the least hassle to set up and transfer funds to.

As far as I know it still offers one of the best interest rates around, especially when it includes penalty free instant access.

cheers

[cjanderson]

Thats fab news!!! Was looking for some monthly payment options, for once cash isa is full. And also, the money i have to pay the taxman on the flat i rent out.

6% gross is 4.6% net for a 40%, so worse than a cash isa, but better than anything else outthere

Catherine

[Grandmaster]

Originally posted by pwray
Coolio, I was thinking of depositing some dosh with ING - is there a reason I shouldn't? :eek:

Just opened an account myself - as easy as pie. Set up everything online, filled in some forms when they arrived and sent them off. Everything set up within a week and very good internet access on top of that. Very happy with ING right now.

[Arv]

Better off investing in shares really.

[tcs]

I've got an account with ING and it's always in the top 1-3.
Don't forget you get interest paid monthly so you're getting interest on your interest if you see what I mean!
4.3% AER...instant access...min investment £1.
Stuffs the high street B/societies out of sight!

[Grandmaster]

Originally posted by Arv
Better off investing in shares really.

And what shares would you recommend exactly? The stock market is picking itself up from its lowest ebb which would indicate that now would be a prudent time to invest for the longer time. However, the recovery is very fragile and I wouldn't invest my money in shares right now.

[ic]

I expect that this could cause the likes of the internet banks to react with similar offers. This announcement has stolen the limelight from the previous high payers such as ING Direct, IF, Egg and Cahoot. Apparently the account won't be available until March 1st. They claim it is to encourage people to save money - the newspaper listed facts along the lines that in the 80's £11 in every £100 earnt was saved, by the 90's it was £8 in every £100, and now it's less than £5 in every £100.

Ian

[ic]

Originally posted by Arv
Better off investing in shares really.
Only if you can accept the risk that you may never get your money back.

[ianmb]

Some more info. here:

http://www.hbosplc.com/media/pressreleases/articles/halifax/2004-02-18-00.asp?fs=/media/press_releases.asp

[GCfreako]

After one year, can you put any amount you want anytime while still getting 6%?

[Comedy of Errors]

Originally posted by GCfreako
After one year, can you put any amount you want anytime while still getting 6%?

Nope. At the end of the year it gets kicked out into a standard Halifax account (you can chose which one) paying only normal boring Halifax rates. So you will probably withdraw it and move it to ING or somebody at that point. Or better still blow it all on stuff from the forums.

Once it has finished you can then start another 6% account if you want.

[keeperbear]

Originally posted by Arv
Better off investing in shares really.


Yes, but you are completely ignoring one thing...........RISK.

Are you an IFA? They also like to ignore the risk attached to investments. ;)

[tamstrad]

Originally posted by Rhino
There's an article about this in the Telegraph today.
Because you have to put your money in monthly and not as a lump sum, although the headline rate is 6%, the interest received is lower than it would be on a lump sum deposit.

They reckon it works out at 4.8 pc net for basic taxpayers.

The maximum monthly payment is £250 which totals £3,000 over the year. If you could pay this in as a lump you would earn approx £180 in interest for the year. However, becauser the payments are made monthly and the balance is transferred to another account at the end of the year you only earn £98 interest.

Nice of the bank to point out this difference, oh wait they didn't

Not a 100% accurate. If you are starting with £3000 in another account, then it will be earning interest as you trickle it into the halifax account.

Say you earn 4% in this account then your actually return for the £3000 across both account will be around 5%.

[tamstrad]

Originally posted by Arv
Better off investing in shares really.

Have a read of "Are you really ready to buy shares?" http://www.fool.co.uk/lrninvint/buyshares.htm?ref=lrninvint (registration required - free)

"Buying shares in individual companies is not for everyone. Here are the three reasons why you shouldn't buy shares.

* You have debts (apart from your mortgage)
* You need your savings for a specific purpose
* You are not prepared to invest for more than 5 years"

(continued)....

[cybergen]

here's an article from the BBC http://news.bbc.co.uk/1/hi/business/3498471.stm

[djblamire]

Is it possible to pre-apply for this, or do we need to wait until the 1st March before we can apply ? - In which case, it may take up to a month to get set up ??

Thanks
Daniel

[friedeggbutty]

Another vote for ING Direct from me.

I opened an account in my wife's name (non-working = no tax to pay on the interest) and put about £25k in using 2 separate "pots" (you can have up to 10 for different purposes) and have had no problem whatsoever.

I might consider the Halifax account but TBH the difference on only £3k (or £1.5k averaged over the year) is only about £20 (Halifax 6%, ING 4.5% soon).

[Roo]

I know that this thread is meant to be about the Halifax offer, but I have to also give the thumbs up to Ing. It just works - full stop. Someone who I work with has also just created an account with them and that has all gone smoothly.

Halifax on the other hand has given me enormous amounts of grief - great difficulty in opening a bank account that should have been straightforward, losing a letter of complaint regarding their credit card then taking over a month to reply to follow up correspondence. My personal opinion of Halifax now is very low and if it wasn't due to the location (and the fact that I need to be able to drop cheques from Ebay in on my way to work ;) ) then I would have moved on.

Last point - Ing Direct interest will increase to 4.5% from 1st March. Great stuff!

[camaj]

Originally posted by ic
They claim it is to encourage people to save money - the newspaper listed facts along the lines that in the 80's £11 in every £100 earnt was saved, by the 90's it was £8 in every £100, and now it's less than £5 in every £100.

I'm sure that's because the interest was much higher then. Remember the athur daley Leeds Gold ads? They were advertising a rate of 10% :eek:

BTW, 6% is better for a monthly savings plan but there's nothing to stop you putting a lump sum in an isa and then part of your wages into this

[Don't Bug Me]

I have to agree with the members about the ING account really easy to open and the best savings account around regarding paying in/out & best interest rate around.. whereas when opening a high street account they give you nothing but grief.. delay everything & when you want anything from them you have to ask at least ten times before anyone takes any notice.

so ING gets the thumbs up from me.

[puddleduck]

Just a head-ups - this has now been launched:

Can't apply online so I just phoned up

http://www.halifax.co.uk/savings/regularsaver.shtml

[Jim989]

Originally posted by friedeggbutty
I opened an account in my wife's name (non-working = no tax to pay on the interest)

Are you saying that because your wife does not work she does not pay the tax on the interest? If so, how do you do this? I thought it was standard practice that your taxed on this stuff. Any advice would be greatly appreciated as my partner does not work.

Thanks in advance.

[cjanderson]

Originally posted by Jim989
Are you saying that because your wife does not work she does not pay the tax on the interest? If so, how do you do this? I thought it was standard practice that your taxed on this stuff. Any advice would be greatly appreciated as my partner does not work.

Thanks in advance.

You put all the money in your wifes name - at present it is assumed a joint account is owned 50/50.

So just have an account in wifes name only - and hey presto, tax free if she earns (including interest) under 4.5k.

Course, she could run off with all your cash, but thats the rsik you take

Shall get an application form for the halifax today i think!!

[Squattie]

Originally posted by AndySymbian
Just a head-ups - this has now been launched:

Can't apply online so I just phoned up

http://www.halifax.co.uk/savings/regularsaver.shtml What details did they need to take over the phone? Is it pretty much everything that's on the application form?

Thanks.

[Jim989]

Originally posted by cjanderson
So just have an account in wifes name only - and hey presto, tax free if she earns (including interest) under 4.5k.


Sorry to sound a bit dense, but do you have to tell the bank this or do you get it as some kind of tax-rebate at the end of the year?

[puddleduck]

What details did they need to take over the phone?

Name, address and the amount you wanted to save monthly.

They set the A/C then and there and gave me sort codes, account numbers etc.

Something will arrive in the mail, which you need to take into your local branch, with opening payment, and some ID.

[ic]

Originally posted by Jim989
Sorry to sound a bit dense, but do you have to tell the bank this or do you get it as some kind of tax-rebate at the end of the year?
If you qualify not to pay tax on your interest, you need to ask the bank for an R85 (http://www.inlandrevenue.gov.uk/pdfs/r85lp_2003.pdf) form - just hand this back to them, and they'll stop collecting tax on your interest. If you become liable to pay tax again, you need to tell the bank.

Otherwise you would need to go through the inland revenue at the end of the year and claim the money back.

Ian

[Jim989]

ic, thanks for your help. I will ask the other half to do this.

Cheers!

[pototea]

are there any better instant access accounts out there?

my brother has £100k sitting in the bank from the sale of his house. he is planning on re-buying when he finds a new job. the best i could find was 4.5% after tax from ing. it needs to be instant access as he expects to buy a house by the end of the year.

[puddleduck]

M&S ISA has now gone up to 4.75%!

I took one out end of March as they are offering +0.5% base rate guarantee until April 2005 - best deal by miles right now, especially as this is 4.75% tax free.

[tejstar]

Wouldn't be able to save much of £100k in an ISA :thinking:

[steve23]

£3,000 limit though

[CrumpetMan]

as you don't want it in a longterm investment why not buy £30k of premium bonds and leave the rest in ING?

[Mark]

Originally posted by pototea
are there any better instant access accounts out there?

my brother has £100k sitting in the bank from the sale of his house. he is planning on re-buying when he finds a new job. the best i could find was 4.5% after tax from ing. it needs to be instant access as he expects to buy a house by the end of the year.

I'd suggest £3000 in a cash isa, then put the rest in an Egg savings account for 6 months. Egg have a "bonus" 0.75% on top of their normal interest rate for the first 6 months, making their current rate 4.75% (it may go up to 5% due to the recent base rate increase).

After the 6 months, transfer the £97k to ING. :)

Originally posted by AndySymbian
M&S ISA has now gone up to 4.75%!

I took one out end of March as they are offering +0.5% base rate guarantee until April 2005 - best deal by miles right now, especially as this is 4.75% tax free.

AFAIK M&S have decided to stop accepting new ISA customers for the forseeable future. They started the ISA as a way to build up cash reserves for their new &more card, and didn't expect the huge response that they received.

Abbey have an ISA that's at a rate slightly better than M&S. I think it's their postal ISA.

A good site to have a look at for personal finance advice is http://www.moneysavingexpert.com :thumbs:


-------------------------

And back on topic of the Halifax account.

I applied over the phone over a week ago, and am still waiting for them to send me the application paperwork. Once that's arrived, I then have to make an appointment to go into a branch to complete the opening procedure.

It seems like quite a bit of hassle to open an account, and their slow processing of my application isn't impressing me at all. It's almost is if they don't want my money... :searchme:

[joeblow]

I read somewhere banks accounts are insurered by the government up to £30,000 (per account) if they were to go bust. So, better be safe and spread the 100k out over a few accounts.

[binning]

Originally posted by AndySymbian
Just a head-ups - this has now been launched:

Can't apply online so I just phoned up

http://www.halifax.co.uk/savings/regularsaver.shtml

anyone know if interest is calculated daily/monthly or yearly.

Doesn't seem to say on the website.

[ic]

Originally posted by binning
anyone know if interest is calculated daily/monthly or yearly.

Doesn't seem to say on the website.
As far as I know, its calculated daily, paid on maturity. As its listed as 6% per annum, that's what you'll get over the year - and as its fixed it won't be changing.

[Comedy of Errors]

Originally posted by Mark
I'd suggest £3000 in a cash isa, then put the rest in an Egg savings account for 6 months. Egg have a "bonus" 0.75% on top of their normal interest rate for the first 6 months, making their current rate 4.75% (it may go up to 5% due to the recent base rate increase).

After the 6 months, transfer the £97k to ING. :)


I'd agree completely on your advice. According to todays papers Egg is indeed increasing the interest rate to 5%. At the end of the six months look around for whoever is doing the best deal for the next 6 months. Worth doing the research for such a large sum of money. While still good ING are looking a bit less competitive - they are only increasing their rates by 0.1% to 4.6%.

And on a very minor point, when you transfer between the accounts after 6 months don't do your BACS transfer near a weekend. It will add 2 days to the transfer time costing you about £27 in lost interest.

[pototea]

an isa is not really good for my brother as interest is paid annually & he already has an isa.

he really needs somewhere that pays interest monthly since he does not know when he is going to buy the house.

the egg one looks good though at 4.75% as you get the interest monthly.

[Comedy of Errors]

Originally posted by pototea
he really needs somewhere that pays interest monthly since he does not know when he is going to buy the house.

It doesn't matter. Any normal account that pays interest yearly or monthly will calculate the interest on a daily basis and pay you all you are owed up to the day you close it.

By normal I mean Egg, ING etc. Savings accounts which do not have limits on withdrawals.

[DarthVader]

Originally posted by Roo
Halifax on the other hand has given me enormous amounts of grief - great difficulty in opening a bank account that should have been straightforward, losing a letter of complaint regarding their credit card then taking over a month to reply to follow up correspondence. My personal opinion of Halifax now is very low and if it wasn't due to the location (and the fact that I need to be able to drop cheques from Ebay in on my way to work ;) ) then I would have moved on.

I have to agree as Halifax were a nuiscance with my parent's mortgage a while back. I do not know what they did exactly but my Dad usually gets pretty annoyed if a company does not do it's job properly and efficiently and he makes them very aware of it.

As for me I was lumbered with them as a child and I decided last year to move to the Clydesdale Bank because Halifax took months (literally) to decide whether or not to let me have a student current account and after I had finally left them they still secretly kept my account open even though I went down to the branch and specifically said I wanted it closed. The only way I found out was because they sent a new solo card a couple of months back.

Anyway I am at peace with the Clydesdale Bank and I never had that peaceful state of mind with the Halifax. I shall never go back to them!

I've also just noticed I can still access my Halifax Internet Banking too (bugger)! :suspect:

[RAPepper]

Originally posted by Comedy of Errors
While still good ING are looking a bit less competitive - they are only increasing their rates by 0.1% to 4.6%.

I think it's going up by 0.2 to 4.7% AER

RAP