first direct offers ‘competative’ rate of 2.6 percent on easy access savings account | Personal Finance | Finance
first direct’s Bonus Saving Account offers an interest rate of 2.6 percent however, this rate is only given if no withdrawals are made. The bank said that dipping into savings “can be tempting” so the account rewards customers for “establishing virtuous saving habits”. For each month a withdrawal isn’t made, first direct will give the bonus interest rate of 2.6 percent on all balances up to £25,000.
The bonus rate applies for every calendar month someone doesn’t make a withdrawal.
If someone has to make a withdrawal, the interest rate drops to 0.65 percent with first direct saying customers “knowing this” could be enough to “curb the temptation”.
If a saver makes an initial deposit of £1,000, after a year the account balance would be at £1,026, including the bonus, or £1,006.50, with just the basic interest rate.
If someone put in £35,000, after a year the balance would increase to £35,750 with the bonus, or £35,227.50 with the basic rate.
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Interest for first direct’s Bonus Savings Account is calculated each day and is paid on a monthly basis.
People can open an account with just £1 and there is no maximum limit to how much a saver can keep in their account.
To open the Bonus Saver account, people must have a first direct 1st Account or a current account.
It can only be opened in one person’s name with only one account per person allowed.
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However, the accounts offering the higher interest rate usually come with some sort of catch.
The bank also offers a market-leading interest rate of seven percent on its Regular Savings account.
However, the account is only available for existing first direct 1st Account customers only and any new non-first direct customers who want to benefit from the rate will need to open a 1st Account before they can open the Regular Saver.
The first direct regular saver account lasts for 12 months from when someone opens it, and the interest is paid in one go at the end of the 12-month period.
They have confirmed the seven percent interest rate is fixed for the entire term.
People however must deposit between £25 and £300 each month by standing order and months cannot be skipped.
Withdrawals for this account are also not allowed and if someone wants to access their money before the year is up, they will have to close the account.
If that happens, people will only get interest equivalent to first direct’s easy-access savings account, which pays 0.65 percent from December 1.
