Birmingham Midshires 5 Year Fixed Rate

JonnyH2

Hi,
Have just seen this new savings account, the 5 year fixed rate 5.03% (monthly option), and thinking of going for it.... The 'Withdrawals allowed subject to 90 loss of interest', would that be on the amount withdrawrn, or the entire balance amount?
If I invested say £10,000, and for some reason had to withdraw £5000 after a year, how much would the charge therefore be?

Thanks.

alastair_h

It would be 90 days loss of interest on the amount withdrawn. If you withdrew £5000 after 1 year the amount available to re-invest for year 2 would be (assuming everything stays the same):-

Year 1 £10,515 - gross before tax (multiply by 0.8 for nett)
Year 2 £5,799
Year 3 £6,098
Year 4 £6,412
Year 5 £6,742

The charge would be approximately £42 gross per month.

JonnyH2

Ok, so I'd essentially be charged £126 (3 months interest) for withdrawing the £5000? Is that right? Do these penalties always charge at gross rate?

Thanks again.

oldfella

I make the penalty around £63

JonnyH2

Oh ok, so £126 on a £10000 withdrawl?....

oldfella

yes thats right