| Product: |
firstdirect.co.uk |
| Date: |
06.12.02 (253 review reads) |
| Rating: |
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Advantages: £25 for opening, Convenient
Disadvantages: Penalties
I was attracted to First Direct because of the £25 offer they had. I went all the way and applied for the account. I almost signed up for it when I noticed that the account demanded that you keep £1k in the account at all times, or paid £1k into it every month.
NOT GOOD!
I complained to First Direct and they offered me another account, which pays very low interest. They offered to still pay my £25.
The advantages are:
No machines
You really do speak directly with a person, which is such a relief! And, the staff are very friendly. They ensure that if they make an error, they will credit your account with £20!
Convenient
There really is no need to visit a bank ever again. Given I hate queues, this is alright with me!
Credit card
They have a really good credit card which is worth signing up for (if only to receive the promotional 6 bottles of wine for free!), ad is easy to service online. However, I would say that the cashback is non-existent and the interest is high (better off going for a Morethan Card, or Egg).
The disadvantages are:
Small print
I almost did get caught out (and I'm an accountant!) by not doing this. If you don't pay £1k in every month, they can charge you the earth. But, all is not lost! They have another account which is called a 'Cheque book' account which doesn't require this. However, the interest paid on credit balances is so much smaller (you may as well forget the interest!).
Penalties
The penalties for going overdrawn without permission are hefty (£25! and £15 for each day after that).
Interest
The interest, as I said is really low. Just remember one thing: When they offer interest of, say 2%, this is usually gross. The net is less 20% of this for tax(say, 1.6%). When you realise that inflation is currently running at 2.3%, the REAL rate of interest a bank pays becomes negative! Even with the highest paying internet savings
account pay only 4%. After tax and inflation, the REAL interest rate is only 0.6%.
The interest for the account I opted for was 1.6%, which results in a negative REAL interest rate 1.32%.
All in all, good service, but bad interest and penalties!
Summary:
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