Intelligent Finance

I must say I was surprised to see so many critical reviews of Intelligent Finance here on Ciao. I felt I must redress the balance somewhat as I have had a completely different experience with them.

Intelligent Finance are a division of Halifax plc. They are solely internet based which is ideal for a lazy bones like me. Having come across a link to their website I went to investigate...

The website (www.if.com) itself is clearly laid out and easy to understand. There are fantastic step by step demos which explain the way IF work using Macromedia Flash or Non Flash (text). You can find information about the different products they offer on this site but in my case I like to talk to someone first so I just telephoned and presented the poor service agent with an endless barrage of questions. The agent I dealt with was incredibly patient and made sure that I understood everything before I finished the call. This, coupled with politeness and a dash of humour, added to my experience and made me feel confident in dealing with Intelligent Finance.

IF claim to be 'not just another bank but a new way of banking' and this is why:

You apply for an Intelligent Finance Plan which is basically a 'folder' containing one or more products. I opened my Plan with a current account and a savings account but you can apply for as many products as you like (eg credit card/loan/mortgage aswell). You treat these products like pots of money and give them any name you want to. For example you savings jar could be called Rainy Day.

Depending on which products you choose there are various options open to you in order to make your money work harder for you:

OPTION 1 - reduce the cost of your borrowings by offsetting your credit balances against your debit balances. It is apparently possible to reduce the cost of your borrowings to 0%!. If you have £2000 in your current account and a credit card balance of £1000 then this means that you won't be charged interest on your credit card balance (not bad heh?) and you will receive interest on the remaining £1000 on the £2000 in your current account.

OPTION 2 - BE WARNED TO READ THIS PART SLOWLY
maximise the interest you receive by matching the interest rate on the money you have with the money you borrow. To explain..imagine you have a £1000 loan and £500 on your credit card (debt of £1500) but £1000 in your savings and £200 in your current account (credit of £1200). By choosing to pay the interest (rather than offsetting it)on the loan and credit card then you receive the credit card interest rate on your £200 of savings and the personal loan interest on the other £800 of your savings aswell as your £200 current account balance.

In essence they stack the credit balances up next to the debit balances. The credit balances are stacked from the lowest interest rate at the bottom to the highest at the top. The debit balances are stacked the opposite way round with the highest interest rates at the bottom and the lowest at the top.

It is quite complicated to explain but if you look at the website you will see pictorial representation to make it easier to understand.

Now, having said this, for someone with only credit balances like me this doesn't apply as I have nothing to offset. However, I can understand how it works for someone with any of the debit products such as a mortgage. I do like the idea of being able to do this in the future which is why I applied in the first place.

So, for little old me with just a current and savings account, what do I get out of it?

Simple - I get savings interest rates on BOTH! (about 4%)

After all the tecchie stuff I would also mention that you get a Switch card on your current account. A joy for anyone who has ever experienced the ravages of just having a Solo card which is not as widely accepted. One great feature is that you don't have to have your monthly salary paid into the current account so you can,in effect, use it as a second bank account like I have done. It just makes it easier for me to separate my finances.

It goes without saying that you can set up direct debits, standing orders or bill payments online. For the unexpected bills you also have a cheque book.
As for getting money into your account then you can either post a cheque or electronically transfer it.

The welcome pack you receive is very clear and detailed so you don't feel comletely removed despite the fact that this is an internet only bank. Plus you get monthly statements through the post.

I can honestly say that I have had a very smooth and easy partnership with Intelligent Finance so far and any queries have always been dealt with promptly whether via the website or telephone. Don't be put off by the 'different way' that IF apply interest as it is easy once you get the hang of it. I would definitely recommend it for those of you that want a second bank account.