Alliance & Leicester launches new Direct Saver account
October 10, 2006
Alliance & Leicester has introduced a new savings account, with a "market leading" interest rate of 5.25 per cent gross, or 5.38 per cent AER.
The Direct Saver account, which the lender claims is "ideal for customers who have a lump sum to put by for the longer term", allows balances between £5,000 and £100,000.
It can be accessed via the telephone or the internet and deposits or withdrawals can be made through a linked current account, either with Alliance & Leicester or another provider.
Interest on the account will be paid monthly, although no payments will be made in months in which a withdrawal is made.
"Direct Saver is ideal for customers who want to earn a high rate of interest on their savings without the risk of a stock market investment," said Ross Dalzell, manager for savings at Alliance & Leicester.
"Research carried out by Alliance & Leicester shows that when people are looking for a savings account, half said that they are put off accounts that have a notice period to access their money. In any case, Direct Saver pays a higher level of interest than notice accounts."
According to a study by the provider, the top factors that borrowers take into consideration when thinking about a savings account are interest rate, the safety of their capital and the provision of instant access.
Written by Peter Kenny · Filed Under News Banking
I applied for a direct saver last week and apart from receiving an email by return when submitting my application, have heard nothing since, why.
Rosemary Rolfe
Is your current account with Alliance Leicester as well? As well as changing my savings account I’ve also decided to move my current account to A&L. This took about 10 days to complete and the setting up of Direct Saver was completed within 24 hours.
Right now my plan is keep a lump sum with A&L Direct Saver were it can earn a monthly interest. I’ll be moving the rest of my ING savings into IceSave for easy access and no penalties. Current account with A&L will be earning 6.10 AER up to £2500 so keep some aside for bills and utilities and the rest with Direct Saver and Icesave.
Goodbye ING … it was fun when you were young but now you’re starting to show your age and not the same as you used to be.
Does that mean that the first £5000 does not accrue interest? Or simply that at least £5000 must be in the account for any interest (on the whole amount) to be added? I don’t want to transfer £5001 to find out that I’m only getting interest on £1. Can anyone please allay my fears? Thanks!
Spoken to A&L and they say you do earn interest on the whole £5001 rather than that measily £1. It’s only when it drops to £4999.99 that no interest is earned.
I was about to close my Directsaver account and move my money to Icesave because of it’s 5.70% interest only to find Directsaver is now giving 5.80% AER. Nice to see A&L acting on the recent interest rate rises from other banks – definitely a change from ING “dragging heels” Direct.
So leaving lump sum with Directsaver for now.
I have noticed on my Direct Saver account that the monthly nett interest accrued on my account has decreased despite my balance increasing by £1,0000. Why?