First Active eSavings - Watch out on the 15k

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.
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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
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First Active could just as easily have clarified their rates.
 
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.
 
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).
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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.
 
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.
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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?
 
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.
 
oldtimer said:
The website clearly states ''amounts up to €15,000 earn 5.22%, amounts > €15,000 earn 4.33% on the entire amount.
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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.
 
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.
 
Originally Posted by Irljidel
So the documentation provided on the site is false. 4.33% applies when total is 15000, not 15001 as documented.
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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
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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.​
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Is this a storm in a teacup or are we just misunderstanding each other?
 
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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.
 
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?
 
Don't forget that interest on this account is calculated daily, as per this:


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
 

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...
 
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!
 
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 said:
This is a joke, having to withdraw cash every month to keep below €15k??
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To avail of the highest rate on offer for demand deposit balances below €15K? No - no joke. Why would you think that it was?
 
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.
 
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