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Barclays Pays 12.5% Interest - Unsurprisingly, Plenty Of Catches
January 2007
Barclays Bank has just raised the interest rate on its Regular Savings Account from 10% to 12.5% and it’s fixed for a year.
Of course though it’s almost impossible for any bank to offer a deal without some strings attached and in this case 12.5% per annum is not what savers will actually receive (more like a maximum of 6.8%). Still, it’s a deal worth considering.
The Small Print
- The deal is only available till the 28th February 2007
- Savers must also open a current account with Barclays and agree to pay in a minimum of £1,000 every month
- The maximum amount payable into the savings account is £250 a month, minimum £25
- Because the account has a maximum amount for deposits per month savers won’t actually receive 12.5% interest on all the money
- Hence, if you were pay in £250 a month for 12 months the total interest you’d receive would be around £200 or equivalent of 6.8% which is still a very good rate
- Existing Barclays customers will not be able to take advantage of this deal
Should You Take Advantage Of This Account
Yes, if –
- You’re organised with your financial matters and are prepared to move your money after a year if another better deal is offered by a competitor bank
- You do not have a large amount of savings and can keep up regular deposits to the savings account
- Note, that after a year any savings will automatically be transferred to an account called the Easy Saver Account which pays at present pays a very uncompetitive interest rate of 3.52%
No, if –
- You’re not that organised with your financial affairs and therefore there's a good chance you won't move your account (if need be) in a year's time
- You have a large amount of savings, in excess of £10,000 because then it’s far better to use the excellent IceSave account which pays 6.05% - See this article for more details
Summary
This Barclays account is not a bad deal but in our opinion it carries too much marketing fluff which is a shame. For example, you can do this but not that, maximum of this and if you don’t do A then B will happen. You also have to jump through this hoop to get the prize etc.
And surely all these restrictions and small print is the main reason why the IceSave Savings account has set the personal finance world on fire because here’s a new bank that has stunned the market by not only offering a fantastic interest rate of 5.45% but with very little if any small print attached.
Maybe the marketing departments of the big banks should take note because in our opinion, thanks to the internet information revolution, there are far more savvy and switched on consumers out there than perhaps they realise.
See Also
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