Halifax Launches 6% Regular Savings Account

Halifax Launches 6% Savings Account [18-02-04]

Halifax, the UK's largest provider of liquid savings, today announces it is to launch the first in a number of new savings products.

Halifax Regular Saver will be launched on 1st March 2004 and the account will offer customers who save a set amount every month for one year, a fixed rate of

6% Gross (6.05% AER) on their savings.

Research conducted for Halifax by NOP World (see Editors Notes), shows that almost 19 million adults do not have any savings at all and, of those that do save, only half again save regularly. Interestingly, according to the research

43 per cent of people (5.5 million), who do not save regularly, said they would be encouraged to save on a regular basis if there was an account which only required a small monthly deposit (£25 was the example used) and that paid a good rate of interest.

Key Features of the account:

Deposit between £25 and £250 each m "People have lost sight of the importance of saving on a regular basis. This new product and its market-leading interest rate should change all that. There will now be a real incentive for people to start savings again."

Editors' notes Halifax is the UKs number one savings provider with a market share of around 16% of household sector liquid assets.

Halifax Monthly Saver continues to be available in addition to Halifax Regular Saver.

For further information customers can call 08457 26 36 46 or visit our Branches on visit our websites:

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Our unique "Savings Review" has already seen over £35 billion in savers' money moved to better paying savings accounts - this year we are making the service even better. Customers will be able to take our 15-minute review, where a savings expert will work through their needs to make sure they've got the right savings products for them. We will provide a clear solution and commitment to review their position in the future to ensure their savings keep up with their changing lifestyle.

The research was conducted for Halifax by NOP World. 967 adults aged 18+ were interviewed over the telephone between 9th and 11th January 2004.

The product features of the new Halifax Regular Saver are:

Product Features

Term: 1 year. All funds, including interest, swept to nominated account on anniversary. Minimum Monthly Investment: £25, by automated credit only (except for initial transaction which can be cheque, cash or transfer from other Halifax account.) Maximum Total Monthly Investment: £250 Maximum Total Annual Investment: £3,000 Interest Fixed for one year at the rate applicable on day first credit is made.

Calculated daily and paid on anniversary of account opening.

On maturity, the interest and capital are swept to the account chosen by the customer at opening.

Paid net of tax unless R85 completed. Interest Sweep to Nominated Account Customers can choose one of the following accounts at opening:

Halifax Instant Saver

Halifax Saver Reward

Halifax Premium Savings Direct

Halifax Web Saver. Number of Account holders Sole accounts only one account per customer. Minimum Age 16 Monthly Credits Automated Credits of up to £250 per month permitted.

Standing Orders

Standing Orders from Halifax accounts must be received by 28th of each month but do not need to be on the same date each month.

Standing Orders from other banks/building societies need to be set up for no later than 23rd of each month to ensure they are received in the Regular Savings account in time.

No monthly payments can be missed during the year. Withdrawals No withdrawals are allowed prior to maturity. Early Closure If the account is closed early, interest will be calculated at the Web Saver (without card) rate from the date of the last anniversary (or opening) to the date of closure. Breach of conditions e.g. missed payment The account will close and funds will earn Web Saver (without card) rate for the investment period and be swept to nominated account.

Reply to
Daytona
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Which, after a second look means ~3.22%pa.

Gross.

Good game, good game.....

Daytona

Reply to
Daytona

No it doesn't. If you invest £100pm for 12 months, you will earn interest totalling £39. That may only be 3.25% of £1200, but of what relevance is that if your mean balance has only been £650?

Sure, you're missing out on spot of compounding, but that's par for the course.

Reply to
Ronald Raygun

You are, of course, absolutely correct

Reply to
Daytona

On the other hand, it has to be said that if you want to take advantage of the 6% rate not by saving from income but by moving existing savings from, say, a 4% account, then if you move the maximum possible £3000 of savings (at the maximum permitted rate of £250 a month) then you'll only be £26 better off at the end of the year (net of standard rate tax). Hardly worth the effort, given that you have to make the deposits by standing order, and presumably take manual steps to move funds from your 4% savings account to the current account from which the SO will operate.

Also, there'll be some loss of interest due to having to transfer the money out of the 4% account before it starts earning in the

6% account. Admittedly that won't be much, perhaps 30p.

And you can bet your boots that as soon as the year is up, the rates will drop to more conventional levels.

But I should have remembered it's bad form to start a sentence, never mind a paragraph, with a conjunction.

Reply to
Ronald Raygun

This is crap. The money at the end of the year gets put into some other dumb account, rather than staying in the savings account, so you can add to it next year and so on. I'll stick with Cahoot.

Kind Regards, Shane Cook.

Reply to
Annon

Without a hint of irony, "Annon" astounded uk.finance on 22 Feb 2004 by announcing:

So? For that year, you're getting 6% AER. Sure, it may not be a great deal of money but it's better than a poke in the eye with a sharp (or blunt) stick.

Reply to
Alex

Alo one of the accounts (the web saver?) actually pays quite competitive interest (4.3%? or so).

Thom

Reply to
Thom

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