Banking/Savings Section

Bradford & Bingley Introduces a Savings Account Paying 10%!

UPDATE - January 2007

• Bradford & Bingley don't know if they're reintroducing this account for 2007
• But The Skipton Building Society is promoting a good looking Christmas Savings Account which pays a great interest rate of 6.8% - Check out the article here

February 2006

Keep your eyes peeled folks because there are always some corking personal finance deals being introduced. Case in point is the Bradford & Bingley's Christmas Savings Account which pays a whopping 10% interest. Of course though most of these deals come with strings attached so read on.

The Christmas Savings Account

• Can only be opened in Bradford & Bingley branches (check the website as it has a 'branch finder' search)
• Pays 10% interest until 1 December 2006
• Monthly deposits of a min. £10 and max £150 are allowed, no more
• Must deposit money every month from Feb to Nov (10 deposits)
• Cannot make ANY withdrawals until the account matures in December (OK, you'll likely be able to take the money out whenever you want but chances are you'll lose all accrued interest, check this point with them)
• By paying in the maximum till December you'll receive £68.75 + the £1,500 deposited

However - One Year On

Readers of this site will all be familiar with the 3 step financial product trick by now -

1. Create a 'best buy' account with a great saving rate
2. Attract lots of deposits
3. Then slash the interest rate drastically when the deal period is over (in the B&B case this would be in December when the interest rate will drop to a pathetic 2.5%)

All the banks know full well that a large proportion of clients who open these accounts will either forget about the interest rate dropping and/or do nothing about it when it happens. The 'best buy' rate that they've had to pay out has really been a marketing expense so to speak.

How To Fight Back - 2 Strategies

1. Are you the sort of person that's always organised and on top of your game when it comes to managing money? If so, deposit cash with the B&B (or other 'best buy' accounts) and move it out to the next best paying account (likely at another bank) when the interest rate drops
2. If you're not always organised when it comes to money you're better off opening an savings account with a bank or building society that has a history of paying a top interest rate with no time bonus (ie, an extra 1%-2% interest for x months). Personally, we like the Nationwide's deposit account and use them ourselves

For more details check out the Nationwide Savings website

Summary

For those that have savings and are willing to move their money around with a little work this account is one of the best around, if not the best. Of course though accounts such as these always look a lot better than they are because they limit the money that can be deposited. Still, one could argue that it will only take 30 mins or less to set up and therefore the extra interest earned is a great investment in time.

See Also

• Bradford & Bingley website Tel - 0800 11 33 33
• Nationwide Savings website
• Find's List of Top Paying Saving Accounts