New Fixed Term Deposit Accounts from Yorkshire Bank

Ifts

New range of fixed term deposit accounts offered by the Yorkshire Bank.

http://www.ybonline.co.uk/personal/savings/fixed-term-and-notice-accounts/term-deposit/term-deposit-personal-savings


Main features

• Guaranteed interest rates - up to 5.16% Gross*/4.70% AER+ if held for the full 5 year term, minimum deposit £2,000
• Range of savings terms – choose from 3, 6, 12, 18 and 40 months and 2, 3 and 5 years
• Start from £2,000 – and save up to £5,000,000
• Interest capitalised and paid annually, or on term maturity
• Monthly or annual payment interest option also available – receive your interest monthly, paid directly to your Yorkshire Bank account

Withdrawals

Withdrawals or early closure of the Term Deposit are not permitted under any circumstances during the Fixed Term except in the event of the death of the Account Holder (or one of them if joint account).

*Thanks to ManAtHome for the heads up*

opinions4u

5.16% Gross*/4.70% AER

I do hate the way the gross rate is displayed for interest on maturity accounts!

Ifts

Blimey o4u, you are a hard one to please. I thought calling it a Fixed Term Deposit instead of Fixed Term Bond would please you and dunstonh & Co!

Although you have got a point with the gross rate on maturity accounts, it is a bit misleading.

As for me sometimes referring to these as Fixed Term Bonds is because I call them what the financial institution offering them at the time calls them (which in this case was Fixed Term Deposit Account), but usually they do mostly market these as Fixed Term Bonds.

celtic123

my bad mate i missed half your post.let me read.silly phone

celtic123

!!!!!! i posted you a reply and its missing!

Ifts

Third time lucky?!

celtic123

personally i see the base rate,libor,bond yields,swap rates,prime rate etc all going up in 2012 due to the quantative and credit easing. these are all ofc linked to saving rates in direct ratios almost. therefore id be apprehensive about a five year savings bond/account.

TCA

According to the Moneyfacts website:

"Linked Product (Non-Funded): Must have or open a Yorkshire Bank current or savings account"

That puts me off for starters. Their multiple options for treatment of annual interest is also confusing for me.

"Interest capitalised and paid at maturity – interest will be credited to the account on the maturity date", or

"Annually capitalised interest – the interest is added to your Term Deposit account on the anniversary every year."

What's the difference between these two? The second option would seem to the normal choice for having interest added back to the account every year, so not sure why anyone would choose the first option, whatever that is?

VT82

celtic123 wrote: »

personally i see the base rate,libor,bond yields,swap rates,prime rate etc all going up in 2012 due to the quantative and credit easing. these are all ofc linked to saving rates in direct ratios almost. therefore id be apprehensive about a five year savings bond/account.

Swap rates are forecast to go up of course. However this is priced into the current swap rate also. If you want to wait a year to take advantage, it just means a year of missing out at earning interest at 4.7%. The 5 year swap rate has just tumbled to about 1.27% so now might be a good time to snap up a 5 year account if you are in the market. The swap rate of 1.27% compares to a 1 year rate of 1.06%, so someone doesn't think rates are going anywhere!!!

I too agree that quoting a gross rate on a 'all interest paid at maturity' account is really misleading.

noh

TCA wrote: »

.................................
"Interest capitalised and paid at maturity – interest will be credited to the account on the maturity date", or

"Annually capitalised interest – the interest is added to your Term Deposit account on the anniversary every year."

What's the difference between these two? The second option would seem to the normal choice for having interest added back to the account every year, so not sure why anyone would choose the first option, whatever that is?

Tax is due when the interest is credited to the account. It may suit some to have all the interest credited at the end of the term depending on their other income.

TCA

Thanks noh. That would explain it. In such cases, is the single payment of interest at maturity the same as the total interest added back to the account annually over the 5 years? Just that it all appears in the final tax year?