Punjab National Bank Int Ltd

Al_Ross

Hi,

Anyone used this bank and had their bond matured in the past,if so any problems,hassles etc in them returning your money ?

Will have a fixed deposit from elsewhere maturing soon and am interested in their current rates.

The Premuim Fixed account appeals to me see below :

Premium Fixed Deposit Interest Rates
Interest Payable on maturity only.
Minimum Deposit is £ 1000. 1st Year --- 3.00% 2nd Year --- 4.20% 3rd Year --- 4.70% 4th Year --- 5.30% 5th Year --- 5.80%
So does this mean if I open the account now in its 5th year the interest rate is 5.8%.

On their web page it also shows:

Interest Rates (in GBP, USD and Euro) valid w.e.f 01.12.2011 (% pa)
Duration GBP USD EUR
AER AER AER
1 Month to < 3 Months 0.75 NIL NIL
3 Months to < 6 Months 1.25 1.25 1.25
6 Month to < 1 Years 1.75 1.75 1.75
1 Year to < 18 Months 3.00 2.25 2.75
18 Months < 2 Years 3.25 2.25 2.75
2 Year to < 3 Years 3.50 2.75 3.00
3 Year to < 4 Years 4.00 3.00 3.25
4 Year to < 5 Years 4.25 3.25 3.25
5 Years < 4.50 3.50 3.50

The 5 years at 4.5% is shown ,can someone clarify please ?

Reaper

Al_Ross wrote: »

So does this mean if I open the account now in its 5th year the interest rate is 5.8%.

Lol, I'm afraid not.
If you open the account and put a sum of money in it will earn 3%. In year 2 it will earn 4.2% etc.

That means it averages out at 4.5% before tax if you leave the money intact for 5 years. If you withdraw it early you get much less because the early years don't pay as much.

Al_Ross

An average of 4.5% before tax over 5 years is quite good, nothing to beat that on this site. Would that be 4.5% if leaving the interest to compound ?

So infact during year 5 ,the interest is 5.8% before tax .

I just want it to be clear to me that some time down the line they could reduce these rates on my account if I already had this it up and running.

Reaper

They can change the rates up until the point your account has been set up and your money has been put in. After that it is a fixed rate and will not change.

On interest payments their web site is a little confusing. They say:

Interest Calculation will be on annual basis and would be payable at the end of the term along with the principal amount of deposit, after deduction of application of Basic Rate Tax.

I take that to mean you will only receive the interest payments at the end of the 5 years, so no compounding will take place. I assume that is why the 4.5% AER is a little lower than I would otherwise have expected from the annual rates quoted. Even so it is indeed a good rate and does come with FSCS protection.

EDIT: There is compounding. See post 13 below

jayship

I called into my local branch today and have had no problem withdrawing a matured bond. However we re-deposited 50% into a new bond as their Festival Season Offer had attractive rates which are 1 Year 3.35%. 2 Years 3.85%. 3 years 4.10%. We fixed it for 3 years with the option that we can withdraw after 1 year and still qualify for a completed yearly rates as specified above.
We were told that this offer is open until 21 November 2012.

Al_Ross

Premium Fixed Deposit Interest Rates
Interest Payable on maturity only.
Minimum Deposit is £ 1000. 1st Year --- 3.00% 2nd Year --- 4.20% 3rd Year --- 4.70% 4th Year --- 5.30% 5th Year --- 5.80%


I have done my sums on the above account and I get the average interest over 5 years to work out at 5.3% . This is with the interest compounded each year till the end of the 5th year.
These figures are before tax of course.

Any Accountants out there like to check my figures.

steady__eddie

I opened one of these a week or so ago in the B'ham branch, about an hour after I had returned home I had a 'phone call from them telling me that one of the forms of I.D. which I had submited (a current bank statement) was unacceptable. :eek: I will not name the bank but I am only a customer, "For the journey" (Chris Rhea, Road to Hell). Being of affluent parentage I have three christian names but my bank has been ommiting to print my initials on my statements for all these years. Another consequence of the credit crisis ? This situation was easily rectified with documentation from an institution who were "On my side".
I must admit that I was somewhat relieved to experience an organisation that does appear to comply with money laundering regs.
p.s. I am not an employee of P.N.B. and am not posting in any other capacity besides that of a saver.
p.p.s. Forgot to mention that you need to open an additional non interest bearing a/c. with twenty quid for transfer of matured funds purposes.

markwilkinson

Steady Eddie - did you just walk into the branch off the street as such or did you have to make a prior appointment? There are no branches near me but we do visit Birmingham occasionally. Might be worth string an account up next time, but I'm not too bothered about a marginal increase in interest if its a bit of hassle to open.

alanq

Al_Ross wrote: »

Any Accountants out there like to check my figures.

Not an accountant but using a spreadsheet....

For £1000 over 5 years I don't agree with 5.3%. I make it

Escalating interest rate gives £1251.89
Flat rate of 4.59% compounded gives £1251.56
Flat rate of 5.04% simple gives £1252

This assumes that the interest is added to the account and not as sometimes is required paid away to a linked account.

Al_Ross

So I could open an Easy Savings Deposit account and would need to deposit £20.00 into it.Is that just to open it as it says no minimun balance on that account?

I see no reason that I couldn't just withdraw the £20.00 when the fixed deposit is up and runnning?

Gromitt

Al_Ross wrote: »

So I could open an Easy Savings Deposit account and would need to deposit £20.00 into it.Is that just to open it as it says no minimun balance on that account?

You can't transfer money directly to a fixed rate account, so you would need to transfer your money into the easy savings deposit account and then to the fixed rate account. You can leave the easy savings account with zero balance, but you must leave it open.