I need help in choosing a current account!

I've narrowed it down to:

Llyods TSB - Under 19's Account (Interest paid quarterly - I assume it is "compound interest" then?)
AER %: 3.56 (very confusing, as it says "quarterly" but this figure says "annually")
Gross %: 3.50
Net %: 2.80

Natwest - Card Plus Account (Interest paid annually?? - it says "p.a.")
AER %: 3.40
Gross %: 3.35
Net %: 2.68


Under Lloyds TSB, say if I have £100, here's what I get:
£100.00 - £2.80 earned
£102.80 - £2.8784 earned
£105.6184 - £2.9573152 earned
£108.5757152 - £3.040120026 earned

End of Year: £111.62 (earn roughly £11.62)


Under Natwest, again with £100:
£100.00 - £2.68 earned

End of year: £102.68 (earn £2.68)


Are these calculations correct? I just need to verify before deciding anything concretely. (Oh and if anyone can recommend any other current accounts with better deals for a 15 year old, post 'em here)

I'm with NatWest, haven't had any problems in the 5 or 6 years i've been with them. Their online banking is useful and easy to use, and they just gave me a £500 interest free overdraft (i only have a debit card btw), without me even asking- so i can't fault them.

My two shiny pennies

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:S

3.5% interest on a savings account?!?!? GAAAH.

My bank pays me 0.125% annually.

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Generally, you will receive interest monthly - it looks like this will be the case with NatWest. It is usually worked out using a rate applied to your closing balance each day and aggregated until the end of the month. You will usually be paid net, ie, savings rate tax (currently set at 10% for the lower tax band that you will be in) will be deducted on your behalf by the bank.

There isn't much difference from one bank to the next when considering current accounts and all will have their relative pro's and con's. Afterall, the differences in interest that you are likely to receive will be small (for one three month period when my lowest balance was ~£300 and I had 2 months where it did not fall below £1,000 I received 22p in interest). I'd go with whichever bank offers (or at least seems to offer!) the best service and features (eg, overdraft facility).

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So those figures and calculations are basically for the average joe like me who has absolutely no knowledge of economics to consume? If not, surely the Lloyds account is a much better deal? (Please respond in layman's terms!)

Well, banks like to throw as many figures at people - as you correctly pointed out - to confuse and addle.

It seems that Lloyds will be the better deal based on net interest rates but the best interest rate doesn't always imply the best account - otherwise everybody would be there, right?

Those yearly interest rates are something of a misnomer as interest is calculated daily and aggregated until the day of payment. The interest figures that are provided in the literature are only really applicable if you don't withdraw or pay in money to your account. The daily rate will usually be buried somewhere in the small print but you can request your interest calculation if you so desire - just be prepared to pay for it!

Like I said, the Best thing to do is not judge the bank on its interest rate alone. Go for the one with the better package. When I was looking for my graduate account, I chose Barclays (even though they didn't offer the best interest rate) because it offered the largest overdraft and the best incentive (music tokens) to open an account with them.

Another consideration is to open a building society account. If you choose wisely and in the future the building society decides to float on the stock exchange you could get a windfall of shares. Beware, you usually have to have been a customer for at least 12 months and make an initial deposit of x amount. Unfortuantely, most of the big building societies (Alliance & Leicester, Bradford & Bingley, Halifax) have already floated in recent years.

I have 250 shares in Bradford & Bingley as a result of its flotation and as well as a dividend every 6 months (~£15-25, depending on profits) I also have the knowledge that, at today's share valuation, I have around £800 in reserve. It's a bit of a gamble in that the building society may never float but the differences in interest are very small unless you have thousands and thousands in the bank. [In which case you wouldn't want it languishing in a low interest bearing account such as a current account anyway.]

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Thanks Johnny boy, I'll just get the Lloyds account then.

If I need an accountant anytime soon, I'll keep you in mind.

One thing you should make sure to check, is the availibility of atms/banks.
Im with a bank at the moment where I don't get charged fees because I am a student, but there is only like 2 atms in the 2 towns I spend my time in [since i go to uni at a town about 50km up the highway] (one of the being the second biggest town in the state, and there are dozzens of atms for other banks).

Out of sheer curiosity, how many major banks do you have over there?
The main ones that I see here [if you care] are:

• Commonwealth Bank
• National Bank
• ANZ
• Westpac/Bank of Melbourne [Im pretty sure they are the same thing]
• Bendigo Bank
• St. George Bank [I don't see many (if any) in this state, but I know they exist

Im pretty sure there might be a couple more in other states too. But the top 3 are the main ones.

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The main banks over here are:

Lloyds
Barclays
NatWest
HSBC
Halifax
Abbey national

[HSBC just recorded pre-tax profits of £11bn. Eleven BILLION!]

Some of the banks charge you to use ATMs if you are not a customer with them but my experience is that most banks do not. I know Barclays, HSBC and Abbey National don't for certain. Availability of ATMs is not really an issue, particularly in London but I guess if BB was in a more rustic environment it would have been a valid point, Tristan.

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Yea, generally, its only ATMs that are in clubs and co-ops that charge you. You've gotta be in a pretty weird place if you can't find an atm, or get cashback

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hey, soz to hijack this thread but i need to open up a new account with a bank. I m with Natwest at the moment, but they arent allowing free overdraft facilities next year for uni students, so thats why i need to open up a new account, does anyone know what the best bank would be?

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I see your point about banks having way to much money, a couple of years back, one of the banks here lost $800,000 playing on the forreign currency market, and they didn't really care all that much.

The bank I am with charges somewhere in the region of 50c for using one of their ATMs and $3 or $4 if you go in and deal over the counter. But since I am a sutdent I get a $12 rebate. But they still charge me to use other banks ATMs (its about $2 as well!). I think the reason for this is to do with the Reserve Bank of Australia (RBA) having accounts for all the banks, and they use these accounts to transfer funds, and the RBA charges them oney on these accounts. I don't want to go too far into it though, as the workings of the money market are hard to explain, I dont know the way your system works, its irelevent to the thread, and quite simply - most of you probably don't care.

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I'm with Barclays and as far as I know, their overdraft facility is still free. I finished uni two years ago and upgraded to the graduate account so it might have changed since, though.

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