A Fool's Favourite Financial Products
One Fool writer tells you what his favourite financial products are, and gives you his pathetic excuses for not having them!
I realised this morning that I don't have several of my favourite financial products. So I thought I'd share my pathetic excuses with you.Personal loansOK, I think I can be a bit softer on myself with this one at least. It's not pathetic, because I don't need to take out a loan. But if I did...I'm not a fan of secured loans for many reasons, so my favourite unsecured personal loan is Goldfish's, because it's the cheapest loan on our database of 69 loans (based on an £8,000 loan) that allows you to settle early without penalty, and to overpay without penalty. (You can make unlimited overpayments without penalty, provided the overpayment is at least £500.)An £8,000 loan over 36 months costs £245.89 per month and £8,852 in total, if you get the typical rate. Talking about the interest rate (APR) isn't useful, because some lenders manipulate them, but for reference it's 6.9% fixed.The very cheapest £8,000/36mth loan on the market is Moneyback Bank, which costs £243.83 per month, or £8,778 in total, providing you get the typical rate. However, you can't make overpayments or settle early without penalty. If you overpay occasionally with Goldfish, you should end up paying an awful lot less in interest, and you'll pay the loan off months sooner.Credit cardsMy excuse for not having my favourite credit card is that I can't apply till I've notified my bank of my new address, which I keep failing to do. Oops!You can't beat cash, so, for anyone who has no other credit-card debts, the card to have is a cashback card. The trick is to pay it off every month without fail, so you don't get charged disgusting amounts of interest. The best card out there at present (for the vast majority, not just me) is the Capital One Cashback Card, which pays 4% for the first three months and 1% thereafter. This is significantly better than the competition, although very high spenders might do better with, say, American Express's cashback card.There is a card paying 5% till the end of January, and 1% thereafter, but that 5% is on supermarket spending only, plus it's only on the first £1,000. (Still, if you're interested, read how it works.)Current accountsI haven't applied for my favourite current account, because I've been switching between accounts that offer incentives for signing up, such as cash (£50 to £100) and free crates of wine. When I become tired of getting around, I'll take out my pipe and slippers, put my feet up and settle on the best account at that time.If that time was now, my favourite account would be Alliance & Leicester's (A&L), because it pays 6.5% credit interest on balances up to £2,500 till November 2008, and then it reverts to the Bank of England base rate minus 1% (currently 4.75%), which is good for a bank account.I'm tempted by Abbey's account, which offers a better deal at 8%, but after twelve months the rate changes, and it doesn't make clear on its website what it changes to, so it can't be good...Still, it's possible I'll get Abbey's for a year before settling down with an account like A&L's.Some other positive points about A&L's account are that you only have to pay in £500 per month and you might be able to wangle a decent 0% overdraft for 12 months.Plus, I reckon I could quite easily post a message on our discussion boards asking if any existing customers would refer me to A&L, for which A&L would pay us both £25.Savings accountsWhy don't I have my favourite savings account? Because I applied for it and the provider messed me around, so I'm sulking.My favourite savings account is the easy access Icesave Savings Account. Although I had problems, I'm one of the few people who Icesave have messed up with, it seems. I've received about a dozen or so accounts from others who have had good customer service, so I reckon I was unlucky. When I've finished moaning to myself I'll try applying again.It's rate is 6.2%, and it's catch-free. This rate can be beaten by 13 other accounts, but nine of those have catches I don't like, including introductory bonuses and penalties for making withdrawals. Two of the accounts are for people in their sixties.That leaves just two standard accounts with better rates. ICICI Bank's rate is 6.31%, but it's rate guarantee doesn't come close to Icesave's exceptional one. Icesave's account is guaranteed to stay at least 0.25% above the Bank of England Base Rate until 1 October 2009. After that, it's guaranteed to at least match the Base Rate till 1 October 2011.Compare this with ICICI's guarantee, which is just that it promises to be 0.25% above the Base Rate till the end of this year.That leaves Sainsbury's Bank, which has a good rate of 6.25%. It promises to be above the average rate (of 100 other savings accounts) till the end of 2010. Problem is, as the average savings interest rate is pitiful, this promise is rubbish.> Read The Worst Ten Financial Products.