# Northern Rock v. Bank of Scotland



## DOS19 (29 Oct 2006)

I have a lump sum of €10,500 that i won't need access to for about 18months.It appears that the best option is either:

1) *Northern Rock On-line Demand deposit* at (_4%) _
or
2) *Bank of Scotland Ireland (Halifax) Monthly saver *(_6.20% EAR; at least ECB+ 1.5% until January 2008) _- My action here would be to drip -feed the €10,500 at the maximum monthly contribution of €750 over 14 months which would amount to €10,500.

My question is over the next 14 months which of the above 2 options is more attractive?


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## Zephyr (29 Oct 2006)

Maybe it's not really a question of one or the other but both. Open a Northern Rock account first and put the lump sum there and then gradually transfer it over to the monthly saver. If you don't need access to it for that length of time then it does seem worthwhile to avail of the attractive regular saver rates. Most of your money is still going to need a home while it's waiting to be transferred to that account and Northern Rock at 4% looks like the best on offer.

Whatever you do, be careful to read all terms and conditions fully. I think the Bank of Scotland Ireland saver account won't give you that full rate if for some reason you need to close the account and withdraw all the money within 12 months of opening it whereas Anglo will give you all the interest up to that point even if you close it. But it's a better rate with BoSI so if you're sure you won't need it inside that term it might be the better option


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## DOS19 (29 Oct 2006)

great, thanks for the suggestion - i presume Northern Rock On-line desposit Acc. allows for Direct Debits to be set - up just like any other account?


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## MugsGame (29 Oct 2006)

NR setup won't allow that -- you'd have to transfer manually from NR to your current account each month.

RaboDirect should allow withdrawals by DD, so that might be a better option, even though the rate is lower.


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## Zephyr (29 Oct 2006)

Yeah, forgot to make that clear, you'll have to transfer money to your current account first, but this shouldn't be a problem if you have it set up as your nominated account with Northern Rock. Of course, you won't be able to just set things up and forget about it which would be nice. If you're going to try and chase the best rates like this it's not going to be completely hassle free I'm afraid. 

Also, regarding Rabo I'm not sure if they allow DDs from the savings account, you might still have to manually move money to their current account each month. But I don't know for certain. I'm sure someone else will be able to correct me if I'm wrong about this.


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## DOS19 (30 Oct 2006)

thanks for the replies. Considering the lack off DD facilities in Northern Rock, I consider my options mutually exculsive. Accordingly, can anyone more mathematically minded than myself enlighten me as to which is the best option over the 14 months:

1) *Northern Rock On-line Demand deposit* at (_4%) _
or
2) *Bank of Scotland Ireland (Halifax) Monthly saver *(_6.20% EAR; at least ECB+ 1.5% until January 2008) _- drip -feeding the €10,500 at the maximum monthly contribution of €750 over 14 months which would amount to €10,500. However, the account from whcih it would be drip - fed would be from a first active instant access savings account which earns very little interest. 

I won't need access to the money over the 14 months.


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## MugsGame (30 Oct 2006)

Very hard to say, as it's unlikely rates will be static over the 14 months. ECB rates are expected to rise in short term, and NR are likely to rise with them (though they may not pass on the full rise.). It's harder to tell if BoSI will increase their rates when ECB do. 

The difference in return on €10k after DIRT isn't going to be big, so I'd go for the simplest option. If you go with BoSI you'll have to remember to stop the Direct Debit after 14 months. So I'd probably go for NR on that basis alone.


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## jpd (30 Oct 2006)

According to my calculations, depositing € 10,500 in N Rock on 1st Nov, leaving it there until 31st Dec 2007 will give a closing balance of € 10,894 assuming the interest rate is 4%, DIRT is 20%

Drip-feeding it into the monthly saver account at € 750 per month and assuming the interest of 6.2% is paid monthly gives a closing balance of € 10,787 not taking into account the interest on the feeder account.


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## MugsGame (30 Oct 2006)

> assuming the interest of 6.2% is paid monthly


It's not, so the BoSI return would be lower still. But thanks for taking the trouble to work the two returns out.
(though you seem to have calculated the return over 13 months rather than 18, so actually BoSI may "win" after all.).


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## DOS19 (30 Oct 2006)

Thanks for helping with the calculations..i appreciate it. i would point out thought that the Bank of Scotland Acc. does state it will match the ECB rate plus 1.5% until January 2008. I don't know if that makes any difference to your views. In any event it appears depositing it with Northern Rock might be the simpler option.


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## infocal (31 Oct 2006)

Anglo Irish Bank. Monthly Saver Account up to 1000 per Month. 
Or 30 Days notics account CAR 6.0%

For more information, please refer the link below:
[broken link removed]


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