Two Year Fixed Rate Cash ISA

future-sailor

Hi, I currently have £11k in a Two Year Fixed Rate Cash ISA with lloyds bank. I've started this in July 2014.

I need to release the money now for personal reasons. On their website they state there is a fine:

"No notice period. We don’t encourage withdrawals on this account. Though they are possible, any withdrawals within the fixed period are subject to a charge the equivalent of 180 days tax free interest on the amount withdrawn. This means you might get back less than you originally deposited."

Can anyone please explain how to calculate this?

The APR is:

"1.70% tax free/AER on balances of £1 - £19,999"

THANKS!

talexuser

180 days = 6 months more or less so on annual interest of £11000 x 1.7% = £187 they will charge you around half of this i.e. around £94 to close the account, so that is what you will lose.

veryintrigued

future-sailor wrote: »

Hi, I currently have £11k in a Two Year Fixed Rate Cash ISA with lloyds bank. I've started this in July 2014.

I need to release the money now for personal reasons. On their website they state there is a fine:

"No notice period. We don’t encourage withdrawals on this account. Though they are possible, any withdrawals within the fixed period are subject to a charge the equivalent of 180 days tax free interest on the amount withdrawn. This means you might get back less than you originally deposited."

Can anyone please explain how to calculate this?

The APR is:

"1.70% tax free/AER on balances of £1 - £19,999"

THANKS!

What interest would you expect to get in a year?

Half it.

Thats what you'll lose(ish).

veryintrigued

Am not being critical of the original poster(s) but this is the second query like this in a week.

Have we got an issue with fundamental maths taught at school or is it just easier to ask these sorts of questions on internet forums nowadays?

Just curious.

Archi_Bald

veryintrigued wrote: »

Have we got an issue with fundamental maths taught at school

We most certainly do. Almost 17 million people in the UK have numeracy skills below those needed for the lowest grade at GCSE

http://www.nationalnumeracy.org.uk/what-is-the-issue/index.html

vacheron

Perhaps worth adding that the OP will have accumulated 3-4 months worth of interest since July so they won't return £10,906 (£11,000-£94) probably something between £10,955 to £10,970

bugbyte_2

What interest would you expect to get in a year?

Half it.

Thats what you'll lose(ish).

Have we got an issue with fundamental maths taught at school or is it just easier to ask these sorts of questions on internet forums nowadays?

Sorry to be pedantic but as you gave slightly misleading information in your first post (as vacheron points out they would not in one respect loose £94 as they have already gained interest, therefore the total loss would be approximately £40) it is slightly rich to then go on about others maths skills.

bugbyte_2

I can see where you are coming from but I inferred from it that the OP wanted to know how much they would be 'fined', which in real terms would equate to £40.

What you could possibly infer from my first post is that we shouldn't really be too bothered if people post what we see as obvious questions or questions that have been answered before because lets face it, to someone, somewhere, what you are asking is going to be obvious and if you looked hard enough you can find the answer to everything on the internet, so there is no point asking in the first place.

veryintrigued

bugbyte wrote: »

Sorry to be pedantic but as you gave slightly misleading information in your first post (as vacheron points out they would not in one respect loose £94 as they have already gained interest, therefore the total loss would be approximately £40) it is slightly rich to then go on about others maths skills.

You may want to revisit the original question but I've pasted it below:

'Can anyone please explain how to calculate this?'

i.e. of '180 days tax free interest on the amount withdrawn'.

I cant see anywhere where they have asked what the closing balance is or what the interest they accrued so far would be but Vacheron has very kindly given them this extra info.

PS just to be pedantic it's 'lose' not 'loose'. The second of these has a very different meaning!

:rotfl:

Archi_Bald

bugbyte wrote: »

I'm not talking to myself here- There was a post between 7 and 8 that has disappeared!

Probably time for conspiracy theories then.

aspiration_2

veryintrigued wrote: »

Am not being critical of the original poster(s) but this is the second query like this in a week.

Have we got an issue with fundamental maths taught at school or is it just easier to ask these sorts of questions on internet forums nowadays?

The idea is that someone else might know slightly better.

I am sure the OP can work out the maths just like you and me.

The reason we came in to this thread is to look at any interesting ancillary issues the question might raise, about interest rates