TSB offers families a bonus on interest

THE TSB is trying to make saving a family affair with a bonus scheme that allows families to aggregate their savings to climb into the higher interest rate tiers, writes Vivien Goldsmith.

The way it works is that a family - which could include parents, children, grandparents, aunts and uncles with between two and eight qualifying TSB accounts - can register as a family group. Each individual account then receives the rate of interest that would apply if the account held the total account balance of the group.

Individuals' accounts will in theory be private, but people may be able to work out what other members of the group have in their accounts, especially if large deposits or withdrawals bring the total into a different rate band.

The three accounts that can qualify for family grouping are the flexible savings account, the 60 Day Notice Acount, and the FirstSave acount for children up to 16.

Interest on the Firstsave account will be paid at the same rate as the highest-earning account, while other accounts boost their rate by getting the rate applicable to the total sum. So in the example the savings accounts move into the pounds 10,000 to pounds 24,999 rate band, and there is a saving of about pounds 85.

------------------------------------------------------------------- FAMILY SAVINGS ------------------------------------------------------------------- Account Balance Normal interest Bonus pounds rate % rate % ------------------------------------------------------------------- 60-day notice 9,000 8.5 9.1 Flexible savings 2,500 7.75 8.5 Flexible savings 300 4.5 8.5 FirstSave 60 7.25 9.1 Group total 11,860 -------------------------------------------------------------------