ICICI HiSAVE Fixed Rate Account: beware

digital

Anyone considering an ICICI HiSave Fixed Rate Account with the option to make withdrawals should be aware that any withdrawal, including early closure, incurs a 'penalty charge' of 3%.

That's £30 to withdraw £1000 of your own money from an account that's already paying a lower rate of interest than the same account without the withdrawal option.

gozomark

any withdrawal, including early closure, incurs a 'penalty charge' of 3%.

presumably only if you withdraw before it matures

Baldur

For accounts opened since 9th (24 month accounts), 10th (6/12 month accounts) or 9th to 12th December (36 month accounts), the penal rate is 2% - http://www.icicibank.co.uk/hisave_fr_interest_rates.html

KingL

digital wrote: »

Anyone considering an ICICI HiSave Fixed Rate Account with the option to make withdrawals should be aware that any withdrawal, including early closure, incurs a 'penalty charge' of 3%.

That's £30 to withdraw £1000 of your own money from an account that's already paying a lower rate of interest than the same account without the withdrawal option.

AFAIK, it's not a penalty charge as such - you just receive interest at a lower interest rate on the proportion that you withdraw early.

skiman1

ICICI have just e mailed to say they are changing the way the Fixed rate with early access account - here it is

We are writing to let you know that with effect from December 24, 2008 the HiSAVE Fixed Rate Account - with early access, product has been withdrawn.

All existing HiSAVE Fixed Rate Accounts - with early access, will continue to be valid until the maturity date.

If you have applied previously for a HiSAVE Fixed Rate Account - with early access, you will be able to invest your funds, subject to your account being opened successfully.

All HiSAVE Fixed Rate Accounts - with early access, opened with the auto renewal option as 'Yes' will automatically change to non-renewal mode from February 01, 2009 and the maturity amount will be credited to your HiSAVE Savings account or your nominated linked current account.

We recommend that you go through the revised HiSAVE Fixed Rate Account terms & conditions on our website www.icicibank.co.uk.

If you have any queries, please write to us at [EMAIL="ukdirect@icicibank.com"]ukdirect@icicibank.com[/EMAIL] or call at 08081 31 41 51 (free phone) and we will be glad to assist you.

So it looks like they want to keep your money now and you cannot access it at all - a bit worrying!!

Stompa

skiman1 wrote: »

So it looks like they want to keep your money now and you cannot access it at all - a bit worrying!!

Though, of course, the majority of fixed rate accounts elsewhere already work that way.

perky_v

skiman1 wrote: »

So it looks like they want to keep your money now and you cannot access it at all - a bit worrying!!

I think you'll find most fixed rate bonds work like this. That's the point really isn't it, to keep it locked away to get better interest.

LongTermLurker

KingL wrote: »

AFAIK, it's not a penalty charge as such

Exactly - you're not being charged anything, you're just not being paid the extra 3% (or 2% as said above) which they paid to people who locked their money away for the "fixed term". As has been said, access to money early which you've locked away is a perk/bonus/benefit, not the norm.

- you just receive interest at a lower interest rate on the proportion that you withdraw early.

Can anyone confirm if you can get access to part of an existing ICICI FTD? I was under the impression you had to encash the lot.

That's £30 to withdraw £1000 of your own money from an account that's already paying a lower rate of interest than the same account without the withdrawal option.

I see where you're coming from though, as you get less interest if you choose flexibility and less still if you use it.

digital

KingL wrote: »

AFAIK, it's not a penalty charge as such - you just receive interest at a lower interest rate on the proportion that you withdraw early.

No, it's a charge. The exact words were 'there will be a penalty charge of 3%' and the phrase was repeated several times.

If the interest rate was the same as on the 'no withdrawals allowed' product then it would be (almost) understandable, but to pay a lower rate of interest and then slap a penalty charge on on top of that is a bit much!

Anyone considering making such a withdrawal may also wish to check that it can be made using BACS. The only reason I spoke to someone at ICICI (and that's never a pleasant experience) was to ask why only CHAPS was listed with a further punitive charge.

KingL

Please illustrate what you mean.

My understanding is that if you take out a fixed term account for say 3 years with say £10,000 of principal and then withdraw say £1,000 at the end of year 1, then you receive 1 year's interest at the penal rate (3% or whatever it was when you opened the account) and 3 years interest on £9000 at the headline rate (assuming you leave the £9000 in until the end of the term, ofc).

How do you understand it works? Please give an example to illustrate your point.



btw, just about all banks will make a charge for using CHAPs

SavingSteve

To me this is a nothing thread. To complain about having to pay a fee to withdraw money on a fixed account is a little silly.

As perky_v says, that is the point of these accounts. They offer a good rate on the basis that you will not touch the money for the term, if you want instant access / no penalties the you do not pick this sort of account.

At the end of the day, to coin an old phrase, it does exactly what it says on the tin.