# First Active eSavings - Watch out on the 15k



## homer911 (17 Nov 2007)

Just a word of caution to all in case you havent noticed.  The 15k limit for the top rate of interest is rigouresly(?) enforced by First Active, but more sneakily, if you lodge 15k by cheque, when the account is opened they capitalise interest for the delay in processing (rather than back date the value date).  This has the effect of throwing your balance over the 15k and getting you less interest


----------



## bacchus (17 Nov 2007)

First Active said:
			
		

> Customers will earn *5.22% AER** on amounts up to €15k
> Customers will earn *4.07% AER** on amounts over €15k



So not sure i get your word of caution if i have read you correctly and understand the  FA rules clearly..


----------



## minion (17 Nov 2007)

bacchus said:


> understand the  FA rules clearly..



Thats the problem isnt it.  I dont believe the FA rules are clear enough to form an opinion for me.


----------



## bacchus (17 Nov 2007)

There is a table in this [broken link removed]of First Active website talking about balances
Balance from €0 to €15k = 5.22%
Balance from €15.001 to €1m = 4.07%
so to me the 5.22% is applicable on the first €15k, and anything above €15k is at 4.07% (but no the lot)

Rabo has a similar wording oth their website for instance


			
				Rabo Web Site said:
			
		

> a great rate of 5.0%* on balances up to €10,000 and a rate of 3.75%** from €10,000 to €1 million.


----------



## oldtimer (17 Nov 2007)

I think Bacchus is quoting from outdated First Active site. Their current website clearly states if the balance goes over €15,000 a rate of 4.33% applies to the *entire* amount. It is therefore very important savers watch the €15,000 limit. I think was discussed at length here before.


----------



## bacchus (18 Nov 2007)

oldtimer said:


> I think Bacchus is quoting from outdated First Active site.



What a great mess this FA website, you are right Oldtimer.

Here is an [broken link removed]FA web page that says



> Get a great rate of 5.22% AER variable*
> (*4.33% applied to entire balance* where the eSavings Account balance is between €15,001 - €1,000,000).


----------



## GeneralZod (18 Nov 2007)

Despite what First Active say on their web site they are applying the lower 4.33% (applied to entire balance) rate once the balance hits €15,000.

This thread discusses an example of this that occurred on my account.


----------



## PetPal (18 Nov 2007)

Pardon me if this sounds stupid.  I opened an account with a cheque for 15k.  As soon as I earn any interest obviously this figure will rise.  By what everybody is saying in this thread, should I keep an eye out everytime interest is added and immediately withdraw it to keep the figure below 15k?  Also, because I opened the account with 15k does that mean I'm on the lower rate of interest (because my balance is NOT <15k)?


----------



## GeneralZod (18 Nov 2007)

PetPal said:


> Also, because I opened the account with 15k does that mean I'm on the lower rate of interest (because my balance is NOT <15k)?



Yes. You are only getting 4.33% AER not 5.22% AER if you opened the account with a cheque for €15k. 

First Active should compensate everyone that's lost out because of this and start calculating interest in the manner they say they do on their website.


----------



## sapmanie (18 Nov 2007)

> Also, because I opened the account with 15k does that mean I'm on the lower rate of interest (because my balance is NOT <15k)?


 
Yes. If you had read the advice given by other AAM members on the thread, you'll find the best advice was to lodge something like €14k and withdraw the interest once the balance started to edge towards €15k...

So what you should do ASAP is withdraw €1k from the esavings a/c.


----------



## GeneralZod (18 Nov 2007)

I've withdrawn €1 to bring the balance to €14,999 and will log in each month just before the interest payment to transfer out enough to keep it below that level.


----------



## PetPal (18 Nov 2007)

GeneralZod said:


> Despite what First Active say on their web site they are applying the lower 4.33% (applied to entire balance) rate once the balance hits €15,000.
> 
> This thread discusses an example of this that occurred on my account.


 
Surely, though, we must be able to do something about this, legally.  I mean, if they're saying on their website that they will pay the higher rate on amounts up to €15,000 and the lower rate on amounts from €15,001 to €1m - and then they're doing something entirely different in reality - that must be false advertising.  No?


----------



## Merrion (19 Nov 2007)

PetPal said:


> that must be false advertising. No?


Its outlined here on [broken link removed] and also here on [broken link removed] that interest of 4.33 is applied to the balance when balance exceeds 15001


----------



## oldtimer (19 Nov 2007)

I think they have it quite clear on their website that the entire amount drops to 4.33% when €15,000 is exceeded. I would say a lot of savers are falling into the trap here of not watching the cut-off. I think it is bad policy of First Active to apply this cut-off. They should operate like Rabodirect i.e. first €10,000 at 5% and above that amount at 3.75%. That way the first €10,000 always gets 5%. Does First Active give any warning when the €15,000 amount is exceeded?


----------



## Godfather (19 Nov 2007)

GeneralZod said:


> I've withdrawn €1 to bring the balance to €14,999 and will log in each month just before the interest payment to transfer out enough to keep it below that level.


 
Hi General, do you withdraw 60 Euro from the 14,999 before the interest is paid? To me that's the reassuring break-even point... What's your opinion pls?


----------



## GeneralZod (19 Nov 2007)

Godfather said:


> Hi General, do you withdraw 60 Euro from the 14,999 before the interest is paid? To me that's the reassuring break-even point... What's your opinion pls?



Godfather, yes €60 is the amount I had in mind as there'll be some months where the number of days between payments will exceed 30-31 days. e.g. Long month and last day of previous month not falling on a working day.


----------



## Conshine (19 Nov 2007)

When is this rate guaranteed until?


----------



## sherib (19 Nov 2007)

This looks pretty clear to me (from First Active eSavings FAQs):
*



What interest rate will I get if my balance goes over €15,000?If the balance of your savings is €15001 or above you will get an AER of 4.33% on the whole balance. 

Click to expand...

*Suppose "whole" is the operative word. Though, on reading again, I agree it's not entirely clear. "Whole" could mean the balance over €15,001. The lengthy debate on AAM clarified it for me.

I've just sent FA an email asking what the rate will be in 2008 - adding that there wouldn't be any point in opening an account now if their rate won't be better than the competitors. A bit cheeky - it'll be a surprise if there's a reply_._


----------



## Godfather (20 Nov 2007)

sherib said:


> This looks pretty clear to me (from First Active eSavings FAQs):
> 
> Suppose "whole" is the operative word. Though, on reading again, I agree it's not entirely clear. "Whole" could mean the balance over €15,001. The lengthy debate on AAM clarified it for me.
> 
> I've just sent FA an email asking what the rate will be in 2008 - adding that there wouldn't be any point in opening an account now if their rate won't be better than the competitors. A bit cheeky - it'll be a surprise if there's a reply_._


 
Hi guys,

if it's not clear:

Up to 14,999 Euro the higher interest, from 15,000 (including 15,000) the lower...


----------



## oldtimer (20 Nov 2007)

Can I repeat again from the website '' Up to €15,000 interest is 5.22%. Amounts greater than €15,000 interest is 4.33% on the *entire* amount.'' In simple terms as long as one has up to €15,000 on deposit the entire amount  earns 5.22%. When it goes  €15,001 on deposit the entire amount will earn 4.33%.


----------



## sherib (20 Nov 2007)

I agree with you Oldtimer or at least I wouldn't take the risk of believing the lower rate _only_ applies to amounts in excess of €15,000. _FA _uses the words *"entire"* and *"whole"* interchangeably which to me seem designed to confuse rather than clarify. The lengthy debate about this in AAM seems to suggest the same. 
_



First Active
For deposits of €15,001 and above, the gross rate of 4.33% AER will be applied to the whole balance.

Click to expand...

 _I still think the wording is ambiguous. In contrast there is complete clarity on _Rabo's_ site:
_



For Example: If you deposit €15,000 with RaboDirect, you will receive 5.0%* interest on the first €10,000 and 3.75%** interest on the remaining €5,000 

Click to expand...

 __First Active_ could just as easily have clarified their rates.


----------



## GeneralZod (20 Nov 2007)

Lads, we're discussing two separate things here and only the second one is the subject of the OP.

1) Once the balance goes above a particular amount the lower interest rate kicks in on the whole amount. This has been established long ago.

2) The lower rate is being applied once the balance hits €15,000 even though First Active's web site says it is applied once the balance hits €15,001.


----------



## Merrion (20 Nov 2007)

Not standing up for FA but they did state that on their [broken link removed]



> Get a great rate of *5.22% AER variable**
> (4.33% applied to entire balance where the eSavings Account balance is between €15,001 - €1,000,000).


----------



## MugsGame (20 Nov 2007)

GeneralZod's point 2) is important. Zod claims, based on the actual interest applied to his account, that FA switch to the lower interest rate once the balance equals €15,000, not €15,001 or €15,000.01.


----------



## IrlJidel (20 Nov 2007)

MugsGame said:


> GeneralZod's point 2) is important. Zod claims, based on the actual interest applied to his account, that FA switch to the lower interest rate once the balance equals €15,000, not €15,001 or €15,000.01.



So the documentation provided on the site is false.  4.33% applies when total is 15000, not 15001 as documented.

GeneralZod have you contacted FA about applying the correct interest rate to your account?


----------



## GeneralZod (20 Nov 2007)

IrlJidel said:


> GeneralZod have you contacted FA about applying the correct interest rate to your account?



Not yet. I'll do it this week.


----------



## oldtimer (20 Nov 2007)

According to the website the lower rate kicks in once a saver *goes over* €15,000. It contradicts what Mugsgame says '' FA switch to the lower interest rate once the balance equals €15,000, not €15001 or €15000.01.'' Furthermore I rang FA to-day and they confirmed this. The website clearly states ''amounts up to €15,000 earn 5.22%, amounts > €15,000 earn 4.33% on the entire amount. As I understand it once a saver hits €15,000.01 interest drops to 4.33% on the entire amount.


----------



## GeneralZod (20 Nov 2007)

oldtimer said:


> The website clearly states ''amounts up to €15,000 earn 5.22%, amounts > €15,000 earn 4.33% on the entire amount.



The web site also states that the 4.33% AER interest rate applies to the whole balance from €15,001 - €1,000,000.

Here is an image grab of the page I took to keep a permanent record of what it says.


----------



## MugsGame (20 Nov 2007)

Their website implies it happens once you reach €15,001. I'm not claiming the website is wrong, just pointing out that Zod claims it is based on his experience.

What I plan to do with my account is lodge €14,250 and forget about it for a year, unless there is a significant change in interest rates there or elsewhere. My time is too valuable to be logging in every month setting up transfers and recalculating the boundary conditions so as not to approach whatever the magic threshold is.


----------



## sherib (20 Nov 2007)

_



Originally Posted by *Irljidel*
So the documentation provided on the site is false. 4.33% applies when total is 15000, not 15001 as documented. 

Click to expand...

_Has anyone got proof that the above statement is not correct? It clearly shows on F.A's site, where the symbol > is used, that the lower rate only applies when the balance is in *excess* of (>) €15,000. 



> 4.33% AER variable
> Applied to entire balance if > €15,000


This clearly means that a balance up to this amount attracts the higher rate, while once it goes over this, even by a cent, it drops to the lower rate. 

It's a different issue about how a deposit of €15,000 can immediately exceed that amount dependant on how interest is calculated. Logic would suggest that €15,000 is €15,000 until the first month of interest is due. It seems that is not how it works (?), so, saver beware! Frankly I couldn't be bothered withdrawing the interest every month when it would be much easier to lodge something like €14,500 or even another couple of hundred Euro.

Incidentally, _First Active_ replied to my email.




> The rate of 5.22% AER is variable so i can't guarantee this will remain the same in 2008.
> 
> 
> There are no hidden charges or penalties with the eSavings account, so should you wish to transfer the funds to another account you can easily do this.​


Is this a storm in a teacup or are we just misunderstanding each other?


----------



## GeneralZod (20 Nov 2007)

The strategy of putting in €14,000 - €14,250 and forgetting about it is perfectly reasonable and certainly I've spent a lot more of my time on this than it is worth..

What bothers me is that First Active have put up at best unclear and at worst contradictory information about the interest rates. A reasoned analysis of what they do state is that the lower rate does not apply at exactly €15,000.  Whether it is triggered at €15,000.01 or €15,001.00 is another matter that could be separately argued as the evidence is less robust.

The information FA have up about how the rates apply to this account have already been revised by them for clarity. Unfortunately they didn't do a very good job of it and worst of all it doesn't appear to accurately represent what they're actually doing when calculating the interest.


----------



## Godfather (21 Nov 2007)

I totally agree with General... I would suggest to stop being so "perfectionistic" about FA esavings... If anyone wants to risk then he/she can put 15,000... If anyone wants to play safe 14,999... To be honest what's a monthly interest on 1 Euro at 5.22% CAR?


----------



## irishpancake (21 Nov 2007)

Don't forget that interest on this account is calculated daily, as per this:



> 44      Interest paid to the customer
> 
> Interest will be calculated on the daily cleared balance and will be paid as detailed on our website www.firstactive.ie. Interest will be paid at our published rates, as they may be DIRT will apply to interest payable on Fixed Term Accounts unless Account Holders are amended from time to time.



from their [broken link removed].

Not sure when it is paid, i think monthly??

So, if you go in with €15k, you would find yourself on the lower rate almost immediately. 

Play safe, stick with opening this account with €14k-€14.25k


----------



## Godfather (21 Nov 2007)

irishpancake said:


> Don't forget that interest on this account is calculated daily, as per this:
> 
> 
> 
> ...


 
Hi irishpancake, interests are paid monthly but I keep 14,999 to be on the safe side and near the end of the month I withdraw 60 Euro via internet before the interests are paid so I always keep on the safe side...


----------



## Godfather (21 Nov 2007)

Hi Irishpancake, re the sentence "Don't forget that interest on this account is calculated daily" that's interesting... So I'd better keep on 14,900 every month...

Good point!


----------



## MugsGame (21 Nov 2007)

Yes, but


> on the daily cleared balance



Interest isn't (shouldn't be!) part of the cleared balance until it's credited to the account.


----------



## GeneralZod (21 Nov 2007)

Agree with MugsGame. 

The principal used in the interest calculation is the cleared balance. The formula excludes from the principal the accumulated interest from the daily calculation. 

From looking at the interest they paid into my account it's clear that they aren't deviating from the normal way of calculating interest. The only problem appears to be that if your cleared balance is equal to (rather than greater than) €15,000 the gross interest rate used is the lower one.

Godfather, you should be safe with a balance of €14,999 and €60 withdrawn a day or two before the last *working day* of the month.

In general we shouldn't have to play it safe with how the bank gives us our interest. It is a completely deterministic calculation. It reflects badly on First Active that some of us feel the need to.


----------



## ft5j60j (21 Nov 2007)

This is a joke, having to withdraw cash every month to keep below €15k??


----------



## ClubMan (22 Nov 2007)

ft5j60j said:


> This is a joke, having to withdraw cash every month to keep below €15k??


To avail of the highest rate on offer for demand deposit balances below €15K? No - no joke. Why would you think that it was?


----------



## brendan76 (15 Sep 2008)

You would think it'd be in the interest of First Active to encourage people to invest more money in the eSavings account, rather than people watching the €15 level, where they remove money and most likely move it to a competitor where they'd get more interest than if it was left earning 4.33%AER.


----------



## AnthonyMc (18 Sep 2008)

Is money safe in this account considering the current environment?


----------



## oldtimer (18 Sep 2008)

Its as safe as any other institution. First Active covered by the irish protection scheme, so, if First Active go bust you will be guaranteed 90% of your savings, assuming you are watching the 15K limit.


----------



## ClubMan (18 Sep 2008)

oldtimer said:


> Its as safe as any other institution.


If you are referring to the money as opposed to the institution then this is not quite true - the _Rabo/Dutch CB _guarantee and the _Northern Rock/HMG _100% guarantee on deposits are better than the 90% of up to €22,222 offered by the _Irish CB/IFSRA _scheme.





> if First Active go bust you will be guaranteed 90% of your savings, assuming you are watching the 15K limit.


And the €15K limit is irrelevant here. The €22,222 limit is what matters.


----------



## brendan76 (18 Sep 2008)

Where can i get more info on this 90% ? first active T&Cs? Website?


----------



## ClubMan (18 Sep 2008)

brendan76 said:


> Where can i get more info on this 90% ? first active T&Cs? Website?


www.itsyourmoney.ie and about a hundred recent threads here on _AAM_ (or at least it seems that way!).


----------

