Difference in interest rates on fixed terms

lotty13

Can anyone please explain why you can get more interest on a 3 or 6 month fixed rate than a 12 also do they work it out on the yearly rate then divide it down to say 90 days for 3 months. We live abroad and have a lump sum to reinvest in July after having a years fixed rate of 7%!!!!! (Oh happy days) We can only use offshore and as the Irish banks are looking a bit iffy and the Halifax who we have it with are only offering 2.5% has anyone any suggestions. It will also be a higher amount that the safety net!

oldfella

depends on how much the banks want money over the given period

the interest rate can be worked out using the gross %, divide by 365 days, then multiply by the number of days in the given period. Might not be 90 etc - you need to work out the number of days in the relevant months.