How I got an 8% savings rate

Johanna Gornitzki's picture

For years, I’ve been rather unhappy with my current account provider Barclays. Not that it’s much worse than any other bank on the British high street, but after discovering it wrongly added payment protection insurance to my graduate loan nearly 10 years ago (yes, I’m still holding grudges) when I was fresh out of university (and yes, I got my money back!), I promised myself I would eventually change bank.

But other commitments meant it wasn’t until this summer that I could finally take the plunge and switch to my new bank of choice, First Direct.

But how did I decide it was the right bank to switch to? They’re all pretty much the same, aren’t they? Love to take our cash and then lumber us with hefty penalties should we even dare to go 50p over our agreed overdraft. Sorry, went off on a tangent there. So back to my decision to switch – there were three things that convinced me to pick First Direct.

Firstly, First Direct came top in our Customer Service Awards this year, in which more than 14,000 of you voted (thank you!). Who could be better at judging the quality of a bank than its own customers? I also have several friends who now bank with it, and they all say they’re happy with their switch.   

Secondly, First Direct offers £100 to switch, and if you change your mind, it even offers you £100 to leave. Who could resist such an offer?

However, it was the third reason that really made my mind up. While I am not overly fussed about which bank I have my current account with, in these times of low-interest rates and soaring inflation I am forever in search of a decent paying savings account. And First Direct’s 8% regular saver, which is only available to its current account customers, was like a shining beacon to me. With the current top-paying regular saver paying just over 4%, getting hold of an account paying twice that is pretty much unheard of. That was it; I was sold.  

How I made £100 from my bank

First Direct is not the only bank offering preferential savings rates to ‘loyal’ customers. For example, HSBC offers an 8% fixed regular saver to all its holders with a qualified HSBC current account. Many banks also offer preferential loans and mortgage rates to their existing customers. 

The lesson in this (if you can call it a lesson) is that, yes ‘shopping around’ is important when choosing a financial product, but so is checking that you're not missing out on any ‘exclusive’ deals offered by your current bank or building society. Hard to fathom in the world of financial services, but sometimes, customer loyalty does actually pay.

NOTE:  A few of you have been asking whether the First Direct 1st Current Account is a paid-for account, and I can indeed clarify that it is free to use. You have to have £1,500 coming in each month (your salary for example) but that is pretty standard. HSBC - which First Direct is part of - also offers preferential savings rates for some of their current account customer. However, to take advantage of that deal you will have to have one of their fee-paying accounts. Hope this helps. 

Your Comments

Gullible! If you save £100 a month, you will receive approx £52 in interest, less tax - this is an annual rate of just over 4% (based on a sum of £1200 invested in a 1 year fixed account.)
The headline rate looks great, but that's it - A HEADLINE RATE - even First Direct don't give you something for nothing!!

I suggest First Direct regular saver account to any one. I hold one and my partner holds another.

they used have this 2 - 3 years ago, I had by that time.

the maximum you save is 3600 ( GBP 300 per month)

go for it.

I have been with Nat West for well over 40 years and have stayed with them partly out of apathy and partly because I haven't had any real issues with them. But in terms of customer loyalty they don't offer me anything extra, interest rates are low and might as well be non-existent on current accounts and as I do all my banking on line I know I should switch to something better. But I have concerns about the process and the problems of making sure standing orders and direct debits are transferred smoothly without problems and to be honest I have no confidence in any bank's ability to do that efficiently. I just don't have the time to chase this process and keep calling the bank to ensure it has been done, is there a bank out there that can actually complete this process in a fast, accurate and efficient manner without me having to do anything more than say "yes" to the new bank???

8% is indeed a good rate, but I tried to open an isa with them last year which they refused to accept. Well actually, they took my money, then claimed they didn't have it, then told me my account was opened in error.

I used to bank with them - over 10 years ago and at the time I was poor and used to go overdrawn. I actually have a great credit rating now, but I was told point blank that I should never bother trying to apply for any of their products ever again - charming customer service!

We have free banking with Rbs are there any charges with these current accounts mentioned, if so how would that compare?

I' afraid I agree with above comments. Because of limit to monthly deposits you have to wait for end of year for real benefit. I'd rather have slightly lower interest, deposit the whole £3600 and get compound interest building up over the year/s.

I tried Barclays monthly saver which was similar, and found it irritating to have monthly deposit limit.

First Direct are said to be good with customer service. However, HSBC once returned personal documents to me in the post in a virtually unsealed envelope. Yet we are told to take proper care of our personal financial details...

What happens if you lose your job and do not have the monthly £1500 deposited into main account?

Also, pensioners who really need some higher interest savings account could not use this if they only have state pension to pay into current account.

I business bank with Natwest and personal bank with First Direct. They are poles apart. Superb service from First Direct - I've been with them for about 12 years now and have yet to see a better service. Natwest - I'll be moving from them as soon as the free banking period os over - they are absolutely hopeless, their online banking is basic at best and staff in branches and on the phone less than helpful.

I just wish First Direct had a business banking licence, they would have my business account with immediate effect.

Hope that helps

However the average amount in the account over the year is only 600 pounds, so to receive that amount in interest is very good. The important thing with regard to regular saving accounts is the source of the funds in to it. They need to be from income and not from another savings vehicle otherwise it could impact on the return you get on the money before it is placed in the regular saving account.

I'm seriously thinking of moving to First Direct. My experience with Santander is unbelieveable.

I banked with Barclays for about 25 years. I even worked for them for 5. I switched to First Direct about 3 years ago and have never regretted it, never had a problem. Always polite, always courteous, always knowledgeable, always perfect. I encourage people to switch all the time. I have my life insurance with them, savings, current account, loan and mortgage. In terms of savings, I use them to offset agains my mortgage. Even though that rate is low compared to this interest rate talked about here, I know that over the term of the mortgage, taking compounding into account, I am saving a SHEDLOAD of cash!

You will experience NO problems changing over to First Direct. I have been with them since they started (in Leeds in the eighties) and have never been dissapointed in their attention to customer concerns. IF any problems/ qhestions etc just call them and you will talk directly (and extreamly quickly at most times of day or night) to one of their clear speaking, polite and helpful staff. Its like having your own personal financial assistant on hand.
I am not employed by First Direct but, like their other customers, feel a desire to be missionary to the cause of good banking. The monthly overdraft allowance of £250 comes in handy as well.

I too have been with FD since they started and I wouldn't bank with anyone else. Well over 20 years and I've had 2 issues in that time. Both times they accepted my side and sent flowers to my wife as an apology.


Gullible? I don't think so. - the 8% qouted figure is right since you do not pay the full amount (£1200 in your example) at the start of the year but drip-feed every month ie by month three at £100 per month you have only invested £300. Your 4% is flawed and would only be accurate if you invested the whole £1200 in one go at the very start. .

Yes i have a first direct account and no i don't work for them. Just trying to be fair to a reasonable bank ( so far) in a sea of sharks.

Why gullible? You are assuming everybody has £1200 to invest in a 1 year fixed account - they don't.

If you're starting out saving from scratch and can put a regular amount away every month, this really is a great deal.

In year 2, you'll be starting with £1200 and will earn £96 on that before tax. How does that stack up to your 4% fixed rate account!!

I'm with First Direct and if I remember right you can open another savings account with them, just leave a pound in it and the £1500 per month is not necessary

I agree with Sandydan - I moved to First Direct in the late 80@s as I was living in NI and wanted a telephone banking account - they are FABULOUS - efficient helpful and know their stuff - you can ring them at 2am in the morning or get a loan decision in 10 mins if urgent! I recommend them to everyone I meet.

I tried Santander to get their £100 cashback (as well as keeping my First Direct a/c) - gosh that bank was SO BAD it was unbelievable - I closed my account within the first year. I can't believe they are still in business! If you need telephone banking you can't go wrong with FD believe me - first class customer service.

I banked with first direct for over 10 years, couldn't fault them. Unfortunately last year I lost my job, without warning, which included accomodation so I walked away with my daughter unemployed & homeless. First direct no longer wanted me as a customer they were the hardest to deal with & couldn't understand my sudden change in circumstances, even though all the call centers are in the UK. Having negotiated with all my credit cards etc I was told over & over first direct only cherry pick & take people with great credit ratings!! So switch only if you know your circumstances will never change.

I've had a fd account since 1993, when i went to live in America, I found it very easy to ring them up and get money transferred to my account in the states. I kept my FD account when I came back and have had no problems, I have a current account and a couple of savings acounts, including the 8 % one, I will empty the 8% one soon as its a year old and then do another for the coming year, you only get the 8% for the first year. I don't have a regular income as I no longer work, so don't have £1500 coming in every month into my current account but because I have a savings account, I dont get charged for my currrent account..
They don't give me an overdraft tho, as I didnt want to pay them £25 arrangement fee.

Im not employed by FD, but find them easy to deal with the phone works.

I had a Regular Saver with Santander which was nothing but trouble, hassle and time spent in branch and on the phone trying to sort it. On one occasion when I asked what had happened the reply was, "Somebody's messed up"

I have been with first direct approx 22 years, about the time they first opened.

during this time I have worked 2 years abroad, and backpacked 18 months around world, changed jobs several times, bought and sold homes. They have been outstanding.

I have several other accounts, bonds etc with other institutions for better rates, but as far as the regular savings, first direct has the best rate out there for this type of account, and to reiterate what someone else has already pointed out to comments posted by GULLIBLE, not everyone has a large lump sum to invest straight off, so the option to put up to £300 a month  away at that rate is very welcome, also once one matures you can withdarw money and start another one, its called, money management and common sense for most people, not rocket science, and not being Gullible, actually being smart.


As far as first direct as a bank is concerned, I highly recommend them to anyone, I have only ever had one complaint in all the time I have been with them, and in end it was my accounting not theirs that caused the error, yet they went out of their way to resolve my concerns, and it was me that ended up embarrassed.

They have always been helpful, totally reliable and dependable, especially when I have found myself in difficulty abroad.   

I use them for all my main banking needs, both on telephone (UK call centres, and on internet)

I cannot fault them, but I do sympathize with the guy who lost his job, its an unfortunate fact of life that a lot of banks and organizations cherry pick, not just first direct.

With regards to Santander I have had dealings with them and they are the opposite end of the spectrum, which is why they offer all sorts of incentives I guess, because otherwise they would have no customers at all, in my experience their service standards were terrible, any benefit of higher interest was blown out of the water by hours of chasing around, on phone and waiting in ( often by appointment only) in branch to sort out even the simplest problem. which happened time and time again, I no longer use any of their services.

Whereas with first direct it has always just been a case of picking up the phone 24/7 anywhere in the world, even once  in an emergency from a public phone, from a cinema foyer in NZ, early am UK time reverse charges to my account, everything sorted in 5 minutes, no drama.

No, I am not an emloyee of first direct, I just tell it as it is, believe me if they were crap, I would be telling you.


 As some have said; it's a good account if you genuinely are a regular saver but if you have a lump sum it's the equivalent of a less impressive 4% so not so great for you.

However, after 12 months it ends and the money is all shunted into another account offering a very poor rate of interest; so be ready to move it on to a better account.

Not sure if it applies to new account holders but I don't pay in more than £100/month to my 1st Direct current account and never pay any charges because I also hold another FD product (a savings account with £1 in it!).  This enables me to use FD as a 2nd account (my main account is with whose customer service is as good as FD but they have the advantage of having "ethical practices") and taking advantage of the regular savings account when they offer it.

I am still kicking myself because they tried to persuade me to shift my mortgage to FD (on condition that I also moved my main account) a few years ago by offering me an offset mortgage at 0.5% above Bank of England base rate for the lifetime of the loan!  I decided not to bother as it was the same price as the 2 year discounted rate I was already on -how stupid do I feel now, can anybody find me a mortgage at 1%?

 Someone said, " ...  I was told over & over first direct only cherry pick & take people with great credit ratings ... "
I opened an account with FD when it began, I stated honestly that my annual income was nil. The account is used for miscellaneous and very small cash incomesuch as Hospital Fund payments. There were no questions asked and I was given a Visa card, which I never used. There has never been any question about the low level of activity in my account.
Like most other customers, I cannot fault FD and I'm proud that it's based in my city - not that I have access to its building. Or need it. The telephone and internet contact services are superb.
I do save a small amount in the regular saver account but am under no delusions that I'm going to get 8%, still, it's playing at being a financier for me!
Our state pensions (mine the minimum, paid through my husband's contributions), go into an HSBC current account because it can be useful for cash payments - in and out - in our local branch. I do feel, though, that I have amore personal relationship with FD than the tellers behind the bullet-proof windows in the branch. I'm treated as an individual by FD.

I cannot fault First Direct. I've been with them many years after leaving NatWest several years after university - NW used to charge me £15/month for going a couple of quid overdrawn! Resulting in it being harder each month not to go overdrawn again and get another bank charge.
First Direct accepted my transfer from NatWest of approx. *minus* £200 and I've never looked back. In the early days I used their telephone banking and laughed when they suggested I open a savings account as at that time I had a student loan to pay and a low wage. I did open the savings account and little by little the money grew. Rather than taking bank charges for going a few pounds overdrawn, they gave me a free £250 overdraft and encouraged me to save. Within a year I never needed to go overdrawn & I had savings for the first time after becoming a student!
Many years on I admit my main savings accounts are elsewhere (better rates)  but I keep my current account and my FD visa. On the odd occasion I have to phone them, they are exceedingly polite, easy to understand (I love their cheery Scottish accents!) and will sort out a problem/query quickly.
A payment for my Lloyds TSB Duo credit cards went astray...Lloyds TSB admitted no liability and made out I was to blame & refused to call me back; First Direct looked into the situation and called me back several times to update me on the situation. Within several hours I knew my payment had definitely left my account & FD's account and that Lloyds TSB were to blame. All Lloyds TSB could tell me was that they would remove the late payment charge; the balance of my previous statement was still outstanding! I finally received a letter from Lloyds TSB saying they had traced the amount - no explanation as to where it was found - oh, and no apology for causing me stress!! Once I know my credit rating has been fixed, Lloyds TSB will be receiving my shredded credit cards in the post!
There is no charge for the First Direct current account if you have the adequate salary going in each month or if you have another account. I was made redundant so looked into this and having my First Direct credit card prevents me having to pay an account fee.
First Direct are a top bank and will put their hands up & say sorry for any mistakes (very few I should think). Many other banks couldn't give a stuff.