Punjab National Bank Premium Deposit A/C

arcadia00

I'm 1.5 into a 5yr term. Got a letter out of the blue yesterday seem to be offering annual interest instead of at end of term. Anyone else get this letter and understand it fully?

Happychappy

arcadia00 wrote: »

I'm 1.5 into a 5yr term. Got a letter out of the blue yesterday seem to be offering annual interest instead of at end of term. Anyone else get this letter and understand it fully?

Not yet, I took out the same offer just before it was pulled, will wait for the postie.

soulsaver

Here is what triggered the offer.

https://forums.moneysavingexpert.com/discussion/4977308

They didn't write to me so I dont know the detail in the letter but you should be aware that the iterest paid at term end is more for tax payers than the interest paid annually.

But note the interest paid at maturity can affect your tax position - £80k in the account would produce c£20k interest payment at maturity. That is treated by HMRC as being earned in that year, so if you're a non tax payer you wont be... and a BR payer likely could be knocked into HR.

arcadia00

soulsaver wrote: »

Here is what triggered the offer.

https://forums.moneysavingexpert.com/discussion/4977308

They didn't write to me so I dont know the detail in the letter but you should be aware that the iterest paid at term end is more than the interest paid annually.

Note the interest paid at maturity can affect your tax position - £80k in the account would produce c£20k interest payment at maturity. That is treated by HMRC as being earned in that year, so if you're a non tax payer you wont be... and a BR payer likely could be knocked into HR.

Thanks for this. I am a non-tax payer and was worried about this but had resigned myself to being paid at maturity after phoning them about a tax cert and they said there was no tax until the very end.

I was a bit confused by this recent letter as the box you tick for this new option says... "I would like interest to be credited to my account annually, compounded and paid at the Maturity".

But you are saying this is a bona fide offer that makes sense for me to take up.

soulsaver

I know - great account, hearts in right place - but it's clear their English leaves something to be desired.

I think they mean it is only paid out at maturity, as opposed the interest being paid out to another account annually whilst leaving the principle in place.

arcadia00

Could I actually tick this box AND enclose an R85 and get compounding effect on the gross interest.

Think I may owe you a bottle of bubbly for this!

PS Yes I think that wording does sort of make sense now, so I will tick it

soulsaver

arcadia00 wrote: »

Could I actually tick this box AND enclose an R85 and get compounding effect on the gross interest.

Think I may owe you a bottle of bubbly for this!

PS Yes I think that wording does sort of make sense now, so I will tick it

It won't cost owt to try... let us know the outcome, could be useful.

I only fought my corner - commendably they decided to apply the solution equitably - everything else being equal, it'll deprive HMRC of £4k of mine in 2017!