Accumulation of Savings Interest

Shimergo

I wanna move cash from a snail-mail savings account (which I've had 9 months) to something online with better security. I'll also need to move a another account soon cos the 1yr bonus interest'll pack up.

My question, for those in the know, is whether it matters exactly when I close the accounts? Does the interest always tot up on a daily basis, or do some accounts only give interest for every whole month the account has been open, or even only if the account is open a whole year or more? Thought I should check first.

Thanks!

Gromitt

You need to check your account T&Cs. Not every account gets interest calculated on a daily basis and there might be withdrawal penalties.

psychic_teabag

If an instant-access account had money calculated other than daily, you could move money into the account in time for the calculation, then move it out again for the rest of the time. (Observe how the Halifax reward current account can be "abused", though it's not exactly the same case.)

That said, being calculated daily doesn't necessarily mean it's all paid : as you say, there can be catches such as the interest or bonus only paid if the account is still open. The recently withdrawn Monmouthshire BS account was a case in point - bonus of 2% pa was (presumably) calculated daily, but only paid if the account was still open on the anniversary. Or I think Nationwide have/had an account where if it was closed, the interest rate was reduced retrospectively back to an anniversary date, or something.

You may be able to withdraw all but the minimum operating balance and still get the reward.

Shimergo

Many thanks Gromitt and psychic teabag. Sorry for the slow appreciation - has taken me a little while to figure this out!

Anyway, these are the relevant bits of the T&Cs on the website of the snail-mail account (it's a KRBS 'Easy access bonus savings account):
- "When interest is paid - For all account types, interest is calculated on the balance held in the account from the date a deposit is treated as received until the day before withdrawal/closure or transfer. For new accounts, interest will be paid on the later of the date the initial deposit is received and the date your identity is adequately verified. Unless account terms specify otherwise, interest is added to the account annually on 5 April."
- The info on withdrawals says nothing else about interest calculations.
- The bit about charges doesn't mention withdrawals.
- There's no mention anywhere about the bonus part of the interest rate. Is that good?

But it does also say "You may terminate the agreement relating to an account at any time by notifying us in writing at our Head Office address, subject to any specific terms applicable to your account" which worryingly implies to me that there may be other T&Cs.

So any thoughts welcome on whether this info guarantees me my full entitlement of 3ish% interest if I close 9 months after opening? Or would it still be safer to leave most of the money there until the 1st anniversary? (I'll need to take some out early though to help fund this year's ISA allowance!)

Thanks again!

Mikeyorks

Shimergo wrote: »

So any thoughts welcome on whether this info guarantees me my full entitlement of 3ish% interest if I close 9 months after opening?

If it's this one :

http://www.krbs.com/products/savings-and-investments/savings-accounts/easy-access-savings-accounts/easy-access-bonus-savings-account-issue-3/

....... (or the easy access earlier version withdrawn last July - which did pay 3%) then you will get the advertised rate of interest (for the 9 months). The foolproof way, if unsure, is to ring them?

Shimergo

Thanks. Thing is I knew their customer service was not foolproof . Anyway, I gave them a ring, and since that matched your confidence, I figured that closing the a/c now'd be fine. So it I did - and it was! Now the dosh is with Skipton which seems to me much harder place for a fraud to raid from. Cheers!