Save an extra pound in Cahoot and you lose £7,000

As you’ll see in the Top Savings account article, internet bank Cahoot has become the new top clean savings account; but only if you’ve got between half a million and a million quid in it! However, the structure of its interest rates is the most bizarre I’ve ever seen.

Cahoot Savings Account Interest rates

  • £1+ 5.75% AER
  • £250k + 6.25%
  • £500k+ £6.45%
  • £1m+ 5.75%
  • The important thing to understand here is that the rate doesn’t just apply for the tiered amounts; it applies for the whole amount you have saved. Now look carefully and you’ll see you get paid LESS if you’ve got more than a million in there. This is absolutely ridiculous. Look at the sums:

  • Save £999,999 and you’ll earn £64,500 interest in a year
  • Save £1,000,000 and you’ll earn £57,500 interest a year
  • This means the one pound extra saved actually costs you £7,000 a year in interest! Anyone lucky enough to have anything over £900,000 in there; beware the interest you’re earning may push you over the limit!

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