Cahoot v First Direct v AA

mary

Our endowment policy will mature Nov 25th giving us approx £23,000+. There is a shortfall, not huge, but... We still have two more years to go until Sept 07 to repay the mortgage. If we repay the £23,000 to the mortgage, we will be clobbered to the tune of some £800 penalty charges as we are half way through a 2 year discounted rate. (Our mortgage is part and part i.e. originally it was an interest only one, then we bought a small bit of land behind our house and borrowed a bit more on the mortgage, hence why although the endowment policy is maturing, yet the mortgage is still continuing). So I was planning to take the £23,000 put it in a high interest savings account until next September 06, when we can then repay to the mortgage lender and then dig out the balance from under the floorboards for the remainder in the final 12 months.

However can someone work out which account will make us the most interest.

Cahoot Bonus Savings account is
5.25% for the 1st 6 months
4.75% for the months 7-9
4.5% for months 10 onwards
AER 4.93%

First Direct E savings account is 4.89% gross and 5% AER, with no interest in any month you withdraw

AA Telephone Bonus Savings Account is 5.25% gross including a 6 month bonus of .65% and the AER is 4.93%

charlieboycat

Go for 6m from November 05 at 5.25% (either Cahoot or AA) and at the end of the 6m close that a/c and switch for the next 4 months into whatever a/c is then paying the best rate.

mary

I already have a Cahoot Savings account - the old 5.3% (no longer available to new people) but any amount over the £50K mark drops to 4.8% and I am already there. So I wouldn't use that account anyway. However, the fact that I already have an account with them, means they already have my ID etc. and I have checked with them that it is possible to have both accounts, so I just hope they don't close it before the 25th Nov.

Thanks.

charlieboycat

Cahoot 5.25% hasn't been open for that long (since 30 September), so hopefully it will still be around in three weeks time. However, the AA 5.25% has been around even less long - it only opened on 27th October. I work on the basis that offers tend to be open for at least a month so you should probably be ok with AA even if Cahoot does close. I suggest you keep an eye on Cahoot - if it closes before you're ready then promptly apply for an AA a/c (you can open either with only a £1 at any time before your policy matures).