Abbey Launches First Home Savings Account
03/11/2008
Abbey has launched a savings account specifically for people wanting to save to buy their first property. The bank's First Home savings account is limited to 5,000 new openings, and pays 8% interest - far above the base rate.
Savers must be aged between 16 and 35, and are required to deposit between £100 and £300 per month by standing order. If they miss a payment, the interest is reduced to just 0.1% until normal payments are resumed. Partial withdrawals are forbidden and, in a move that could be a stumbling block for some, if the saver wishes to close the account they must meet with an Abbey mortgage broker.
David Hollingworth from broker London & Country told The Independent: "The idea of this ... is to migrate the savings customer into the more profitable mortgage one. I understand that the customer doesn't have to take a mortgage with the Abbey, just see the adviser. What they are best doing is taking the high interest rate on offer, see the Abbey adviser, but also compare what is being offered by other lenders and go for what suits."
Louise Kelly, 34, a marketing executive from Bath told the same report: "I like the discipline of not being able to take money out, provided it comes with a high rate of interest. Hopefully by the time I have saved for a deposit the market will still be in the doldrums. That way I can get the most for my money."
Savers must be aged between 16 and 35, and are required to deposit between £100 and £300 per month by standing order. If they miss a payment, the interest is reduced to just 0.1% until normal payments are resumed. Partial withdrawals are forbidden and, in a move that could be a stumbling block for some, if the saver wishes to close the account they must meet with an Abbey mortgage broker.
David Hollingworth from broker London & Country told The Independent: "The idea of this ... is to migrate the savings customer into the more profitable mortgage one. I understand that the customer doesn't have to take a mortgage with the Abbey, just see the adviser. What they are best doing is taking the high interest rate on offer, see the Abbey adviser, but also compare what is being offered by other lenders and go for what suits."
Louise Kelly, 34, a marketing executive from Bath told the same report: "I like the discipline of not being able to take money out, provided it comes with a high rate of interest. Hopefully by the time I have saved for a deposit the market will still be in the doldrums. That way I can get the most for my money."
