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RBS Transfer ISA Real Interest Rate
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poodlist
Posts: 1 Newbie
I'm thinking of transferring about £30,000 into the 7.25% RBS Cash ISA. I wonder if anybody has any thoughts on the following.
The ISA offers 7.25% for 12 months, including a 2% bonus. After that it reverts to the standard rate, currently a not very enticing 5.25%. However, to complicate things it states on their site that the bonus is paid in two tranches, the first in March 2009 and the second in March 2010.
So, what happens if I transfer out from RBS after 12 months, say around September 2009? Do I lose the second bonus instalment entirely, resulting in a real rate for the year of 6.25%? Do I receive half the second bonus instalment, pro rata to the six months after March 2009 I would have the account open? Or if I leave a nominal amount in the account do I get it all?
In other words, to get both bonus instalments, do I need to keep £30,000 at 5.25 for six months?
The ISA offers 7.25% for 12 months, including a 2% bonus. After that it reverts to the standard rate, currently a not very enticing 5.25%. However, to complicate things it states on their site that the bonus is paid in two tranches, the first in March 2009 and the second in March 2010.
So, what happens if I transfer out from RBS after 12 months, say around September 2009? Do I lose the second bonus instalment entirely, resulting in a real rate for the year of 6.25%? Do I receive half the second bonus instalment, pro rata to the six months after March 2009 I would have the account open? Or if I leave a nominal amount in the account do I get it all?
In other words, to get both bonus instalments, do I need to keep £30,000 at 5.25 for six months?
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Comments
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This is a good question, which I would ask RBS.
The reason why I plumped for the NatWest version rather than the RBS version is with the NatWest version the interest is monthly, so you don't lose any bonus if you choose to take out money halfway through the offer period.0 -
This is a 'best buy' ISA for people who want to transfer ISAs valued at £15k-£17999 or £24k-£26999 but the the answer to the OP's question drastically affects how attractive this ISA is. Has anyone obtained an answer from RBS about whether all (or part of) the money has to be kept in the account until March 2010 to receive the second bonus payment?0
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I haven't, but because the NatWest account is monthly interest it isn't as clear cut as that if you're close to the edges.
Imagine if you had £26500. You'd earn roughly £153 per month in NatWest interest at 7.16%. So at the end of the fourth month your balance would be more than £27000 and you'd move up to the 7.32% tier. Then you'd earn roughly £159 per month. If my compounding is right it's £1925 per year.
In RBS, assuming no funny business with the bonuses, you'd earn 7.25% on the whole lot, or £1921.
In that case it's very close, but if you could drop into a higher band sooner the difference would be bigger. For £26900 you'd earn £1965 in NatWest and £1950 in RBS.0 -
I'm still pondering both of these ISAs and now with RBS not looking good I'm not so sure, have any of you taken the plunge?The birds of sadness may fly overhead but don't let them nest in your hair0
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