Northern Rock Fixed Rate Bond

fatbob10

looks like a winner to me - dont think this account will be around for long - wish I had more dosh to stuff in it

rb10

Grumps wrote: »

The only downside I can see is that the best rate is on interest calculated annually, so withdrawing mid or part year should be avoided.

No, calculated daily and paid annually.

This means that you get interest for each day that your money is in the account (just like every other savings account).

There is no disadvantage to withdrawing part-way through the year. You will still get interest for every single day that the money is in the account.

Ifts

Also article here on the Northern Rock 4.3% bond that can be cashed in:

Read more: http://www.thisismoney.co.uk/savings-and-banking/article.html?in_article_id=521478&in_page_id=7#ixzz1Bb10bIzs

SnowMan

marionandpaul wrote: »

Northern Rock are offering a 5 Yr Fixed Rate Bond paying 4.3% gross. However, it looks like you can terminate the bond (provided you give 180 days notice of closure) at any time without penalty. So, it looks like you can open the account and if and when interest rates look like they are on an upward trend, you can close the account and move the money to take advantage of a higher rate. Am I missing somethin?

Good spot :T

You don't appear to be missing anything.

It says at

http://www.northernrock.co.uk/savings/fixed-rate-bonds/fixed-rate-notice-bond_issue_1/using-this-account/

With our Fixed Rate Bonds you can withdraw funds from your bond prior to maturity if withdrawals are permitted as a feature of that particular issue. Withdrawals from some issues may be subject to a notice period, whilst others allow no-notice access. Please note, withdrawals made from your bond will reduce the return on your investment. Please refer to the Summary Box for further information.

So that takes us to the the summary box at

http://www.northernrock.co.uk/downloads/summary-box/FRNB_summary_box.pdf

Withdrawal arrangements: 180 days’ notice must be provided to make a withdrawal. Withdrawals cannot be made outside of the notice period.

So surprisingly no mention of a withdrawal penalty and so seems to imply there is none. If you took it out on that basis then hard to see how they would be able to apply a penalty given there is no mention of it.

So on that basis for example can be turned into a bond of between 6 months and 5 years at 4.3% AER, the length depending on when you give the notice.

So for example it can be run as a 12 month bond at 4.3% AER (much higher than next best one year bond rate at at 3.25%) by giving notice roughly at month 6, with the additional option to extend by not giving notice at around month 6, or the option to cut short by giving notice before month 6.

It is a bit like the Newcastle 5% 5 year bond that some of us took out a while back that allows penalty free withdrawal with 90 days notice in that case.

Grumps

rb10 wrote: »

No, calculated daily and paid annually.

This means that you get interest for each day that your money is in the account (just like every other savings account).

Thanks for that correction. I'll readily admit that I'm not au fait with principles concerning Savings accounts. I tend to think 'behind the headlines' on such matters.:embarasse

Old_Slaphead

I have been told, although it's not been confirmed, that this issue is being closed today.

Presume NR have seen loophole.

KenC_3

I had a cheque accepted at a branch this morning and was told it was now on Withdrawal Alert. Be quick!

SnowMan

Also just opened in branch about 11:30am.

Have just transferred money in from my e saver 4 Northern Rock account.

Also told in branch account is on withdrawal alert.

Lady behind me in the queue was about to open one too!

You can go for the on-line application, you get a form to print-off and send off to the Northern Rock freepost address. I imagine (but don't know) as long as you do the application now and don't delay sending on that will be accepted also.

GCH888

Would it be considered cheeky to open the account at the branch and once completed advise them that you want to close the account in 12 months time?

Woo hoo ... one year fixed rate bond paying 4.3% AER.

TCA

GCH888 wrote: »

Would it be considered cheeky to open the account at the branch and once completed advise them that you want to close the account in 12 months time?

Woo hoo ... one year fixed rate bond paying 4.3% AER.

They'd tell you to come back in 6 months time.