First Active Interest Rate Changes

In today’s Irish Times First Active are advising their interest rates from 01/03, my issue is with their ECB Rate Linked A/C. It states the new rate on this a/c will be 4% including bonuses, it is currently 4.5%. The rate excluding bonuses remains at 3.5%. This would suggest they are reducing the bonuses by .5%.

My T&C’s state interest for €15K+ is .5% below ECB + .8% if you make < 3 withdrawals per quarter, and a further .2% if you make < 12 withdrawals per year and state the current rate including bonuses is 4.5%.

I’m thinking this won’t affect me, it’s only for new a/c’s but looking at the T&C’s under bonuses the last T&C states “F/A reserve the right to amend these T&C’s “ in particular if there is any relevant material change in the prevailing legal, tax or regulatory conditions.

Is this their get out of it clause?

Hi twofor1

I don't follow the story of interest rates. However they could not use that clause to vary interest rates which they had already agreed. This clause would cover such things as a change in the tax regime e.g. DIRT which made the account no longer viable.

Brendan

[broken link removed] guarantees to pay at least ECB-0.5%, i.e. 3.5% at present. Additionally a 1% bonus was paid if you met certain conditions.

FA have reduced the maximum bonus from 1% to 0.5%. This keeps to the letter of their rate guarantee, if not the spirit, as the bonus was never guaranteed. Ulster Bank offer a similar product, so it will be interesting to see if they follow suit, given that they have the same parent company and use the same back-office systems.

Hi guys,

v. interesting... I see there is a bit of a downfall in the rates around... I'm v. curious about the reaction from Ulster Bank Rew. Reserve...

twofor1 said:

In today’s Irish Times First Active are advising their interest rates from 01/03, my issue is with their ECB Rate Linked A/C. It states the new rate on this a/c will be 4% including bonuses, it is currently 4.5%. The rate excluding bonuses remains at 3.5%. This would suggest they are reducing the bonuses by .5%.

My T&C’s state interest for €15K+ is .5% below ECB + .8% if you make < 3 withdrawals per quarter, and a further .2% if you make < 12 withdrawals per year and state the current rate including bonuses is 4.5%.

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Just to point out that there are better rates on offer anyway - see the Financial Best Buys forum.

F/A have confirmed by phone today the max bonus is reduced to .5% and also applies to existing ECB RATE LINKED Accounts.

It’s actually elderly relations a/c. After having to wait 60 days to close their N/R a/c last year they now want instant access in case the same happens to their new bank. On line a/c’s are not an option (sure why would you put money in a computer you would be better off putting it in a bank ).Choices are limited but Anglo’s 4.5% looks good, its instant access and it can be operated by phone/post.

ClubMan said:

Just to point out that there are better rates on offer anyway - see the Financial Best Buys forum.

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Ciao clubman, I agree but I think there is an ongoing trend in some banks. I feel like they are all looking at each other and as soon as a bank gets too many savings for their investments-portfolio then they reduce the rate... Maybe I'm just worrying too much...

thanks for the info Twofor1. I didn't notice it and have an ecb account with fa. going to withdraw it now and deposit it into ebs as they are a full 1% better now (5.10%)and you can do it locally . also maybe put some into irish nationwide at the 5.10 but don't think you can do this locally. on the demut bit with irish nationwide does anyone else think that when the year is up with this particular account they will just close it so as not to leave you as a member? the more customers they can attract now the more attractive the company will be to a purchasing bank so it maybe its in their interest to attract a lot of new customers now, who will make the company more attractive for selling , but whom they intend to shove out next year anyway? (or am I just one of those sad creatures with an overactive imagionation?)

cuchulainn said:

on the demut bit with irish nationwide does anyone else think that when the year is up with this particular account they will just close it so as not to leave you as a member?

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They seem happy enough to attract new members especially since it means €20K in deposits! Anyway - I don't think that they can unilaterally kick you out as a member by closing a particular account.