Close Savings 3 Yr Fixed: is it worth fixing for 3 yrs

sindersoot

Any opinions on whether it would be sensible to fix into 3 yrs at this period in time? I'm looking at Close Savings Premium Fixed Rate 5%.

Ifts

sindersoot, thanks for posting about the Close Brothers 3 year 5% offer.

Its as good as your going to get at the moment, most other 3 year fixed rate bonds are offering around 4% and even the 5 year fixed rate bonds are less than 5%. The Close Brothers fixed rate deposit accounts are not even on moneyfacts.co.uk best buy table as of yet.

Close Brothers have also got an 18 month fixed rate bond offering 4%

Link: Premium Gold 18 Month & 3 Year Fixed Rate Deposit Accounts

After a quick glance at reading the terms & conditions a few points to consider:

• The minimum deposit is £10,000
• Postal applications only
• Interest paid annually to your nominated account
• No early withdrawals during the term
• Interest on deposits of £50,000 and over will automatically be paid gross

alanq

Although the accounts are not shown in MoneyFacts best buy tables they are on its database and can be found by searching. Strangely choosing a term of "up to 5 years" does not find the accounts. One has to select "up to 2 years" for the 18-month account and "up to 3 years" for the 3-year account.

As Ifts says, those are the best rates available at present. There is always the possibility that better rates will come along during the term. Only chose one of these accounts if you can be absolutely sure that you won't need the money before maturity. We see quite a few cases on the forums of people who urgently need money that they have tied up.

Nice to see that the matured funds will be paid back on maturity to an account of ones choosing. None of the "if we don't hear from you we will roll it over..." nonsense.

Speculator

now updated on moneyfacts and is now a best buy.

TCA

Looks to me like you don't have the option to have interest credited to this account, so there's no compounding. Someone can hopefully confirm my assumption but does this not make the effective rate equal to a compounding account offering 4.57%?

Still a good 3 year rate mind you.

Stompa

TCA wrote: »

...but does this not make the effective rate equal to a compounding account offering 4.57%?

Only if you assume that any interest paid out earns no further interest until the 5 years is up. In reality, you'd probably stick it in another interest bearing account.

oramgepekoe

Putting some in both the 18 month and three year bonds might be a good option.

Ifts

Just phoned Close Brothers to check a few things-
If you don't want interest to paid gross, deposit less than £49999 in the account.

You could always open 1 of each of the accounts (1x 3 yr bond and 1x 18 mth bond) to deposit up to the FSCS £85K limit, for a sole account holder you are not allowed to open more than one of each of these accounts. You are allowed more than one of these accounts if you open one as a sole account holder and the 2nd as a joint account holder.

If you want you can send in an original bank statement instead of a photocopy but it will not be returned to you.

iilg

On the Close Brothers site:

Important notice to any customers who have an overseas bank account






As previously notified to customers via our website and your account statements, Her Majesty's Revenue and Customs ("HMRC") placed a legal obligation upon the bank to provide information relating to customers with a UK address known to hold a bank account outside the UK.


Slightly off topic but is this normal?

soulsaver

iilg wrote: »

On the Close Brothers site:

Important notice to any customers who have an overseas bank account






As previously notified to customers via our website and your account statements, Her Majesty's Revenue and Customs ("HMRC") placed a legal obligation upon the bank to provide information relating to customers with a UK address known to hold a bank account outside the UK.


Slightly off topic but is this normal?

Is it inferring that if funded from an offshore account by a UK resident Close must inform HMRC?

Old_Slaphead

They are also offering these rates to savers with the 4.3% 2 year Premium Gold account that's maturing at beginning of April 2011 provided application is returned by specified date

In past Close have been fairly good in announcing closure dates.