Help Interpreting T&Cs - Santander/BBG Notice Saver

JayEm

Hi,

The rate on one of my savings accounts has dropped from around 3% to 0.5% and so I need to move all my money somewhere else, however I don't full understand the following and was wondering if someone could clarify:

Where less than 60 days’ notice of withdrawal is given, an amount equal to 60 days’ interest on the
amount requested to be withdrawn will be deducted from interest otherwise payable to you but we
reserve the right to deduct it in whole or part from the Account balance (including on closure of the
Account). Where less than 60 days’ notice of withdrawal is given and we deduct an amount equal to
60 days’ interest or any part of it (and other charges where applicable) from your Account then if the
balance remaining is less than the funds requested to be withdrawn we will transfer the balance
remaining in the Account to your Nominated Account instead (including on closure of the Account).

Does that mean they'll deduct 60 days interest (@ 0.5%) from my current balance? Or will it be deducted from any interest owed to me? Which seems odd since isn't that simply the same as them not paying interest this month (I've been getting interest monthly instead of yearly)??

Baldur

JayEm wrote: »

......Which seems odd since isn't that simply the same as them not paying interest this month (I've been getting interest monthly instead of yearly)??

So, they owe you at most 30/31 days interest but you have to pay a 60 day interest 'fine' for failing to give adequate notice - how else would they recoup the additional 30 or so days worth of interest without deducting it from your balance?

pressuredrop_2

Depends when the rate dropped. If today, 3% charge would be logical.

JayEm

pressuredrop wrote: »

Depends when the rate dropped. If today, 3% charge would be logical.

If the rate dropped a month ago, would the charge be 30 days interest at the new rate plus 30 days interest at the old rate? Or 60 days at the current rate?

pressuredrop_2

30 days new, 30 days old, sounds logical.

Loughton_Monkey

My interpretation: Seems the account was 3%, but now only 0.5%. We do not know how long ago it dropped.

However, the clue, I think, is in "will be deducted from interest otherwise payable to you". So if you were to kindly give them 60 days notice today on the full amount, you continue earning 0.5% until the last day, and then you close it all off.

But instead, you now go, today, and demand instant closure. The interest that would have been payable is 60 days times 0.5% [i.e. specifically, the "interest otherwise payable"]. So this is what they will deduct from today's accumulated balance. Since 0.5% future interest is a miserable amount, this is a 'hit' worth taking to move it to somewhere more lucrative.

But check with them first.

JayEm

Loughton_Monkey wrote: »

My interpretation: Seems the account was 3%, but now only 0.5%. We do not know how long ago it dropped.

However, the clue, I think, is in "will be deducted from interest otherwise payable to you". So if you were to kindly give them 60 days notice today on the full amount, you continue earning 0.5% until the last day, and then you close it all off.

But instead, you now go, today, and demand instant closure. The interest that would have been payable is 60 days times 0.5% [i.e. specifically, the "interest otherwise payable"]. So this is what they will deduct from today's accumulated balance. Since 0.5% future interest is a miserable amount, this is a 'hit' worth taking to move it to somewhere more lucrative.

But check with them first.

Thanks for the input! I emailed them yesterday and their reply confirms your interpretation; the penalty will be charged at 0.5% AER for the whole 60 days. :cool2: