Wednesday, May 09, 2007

Banking in the UK

I was curious as to what interest rates for savings accounts, loans and other Bank Accounts were in the UK. I headed over to visit A&L (Alliance-Leicester) because I had heard they were given the “Best Current Account Provider” award in 2006, I thought that would be a good place to get some numbers to be able to see what the differences were in the banking industry between the UK and the US.

When it comes to savings accounts, they have a rate of 5.80% AER (variable) on savings between £5,000 and £100,000, which means a little under $10,000 US dollars would be needed to get that interest rate. Checking a few local banks, with a minimum of $10,000 you'll get a savings rate of .20%, if you go for online banking in the US you can find some that are paying just over 5% on savings accounts. Each one had different terms.

What I learned in the end is that one thing the US and the UK do share in common is that it makes sense to shop around for the best interest rate and to pay attention to what awards or bank performance issues are being reported both good and bad before putting your money anywhere. What I thought would be a simple comparison can't be since there are different laws and other variations that would come into this making an apples to apples situation not exist.

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