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psychic_teabag

Note that the bonus is payable on the anniversary : closing early would forfeit the bonus, so you'd only get 2% (IIRC)

Steve_xx

psychic_teabag wrote: »

Note that the bonus is payable on the anniversary : closing early would forfeit the bonus, so you'd only get 2% (IIRC)

To overcome that problem one would simply leave £1 in the account.

Steve_xx

ejv wrote: »

So this would allow one to close the account as well ,without penalty?

Incorrect. There would be a penalty if you closed the account. You would lose out on the 2% bonus. Better to leave £1 in the account until the day after the anniversary of opening it.

ejv

Steve_xx wrote: »

There would be a penalty if you closed the account. You would lose out on the 2% bonus. Better to leave £1 in the account until the day after the anniversary of opening it.

Thanx Steve.

Leaving £1 would avoid penalty and also fetch the bonus rate at 12th month.
How would they calculate the interest +bonus?Say , I deposit £6000 in 6 months and then withdraw £5999. Is it correct that at 6th month's withdrawal, they pay 2% for the £5999 and at 12th month, they would give 4% for the remaining £1?:o

psychic_teabag

I think they pay interest on the 31st March, don't they ? So you wouldn't get any interest just because you happen to withdraw most of the cash in 6 months time.

Note there's a difference between when interest is earned/calculated and when it is paid. Interest is calculated daily, even if it is credited on arbitrary days. So you'd earn interest on an average balance of about £3000 for 6 months, but that wouldn't be credited until end of March. IIRC you'd get half the interest (2%) then, and then the 2% bonus on the anniversary. I'm not sure if they'd flush the 2% interest earned since start of April then, or (more likely) if that would wait until account closure or next end-of-March.

psychic_teabag

GoGetGirl wrote: »

Anyone had experience of the Monmouthshire BS? Just looking at their Flexible Saver Iss 2, paying 4% but incs 2% conditional bonus payable on 1st anniversary. Variable rate so could draw you in and then drop rate

There's a thread about it here : https://forums.moneysavingexpert.com/discussion/3851027

Steve_xx

psychic_teabag wrote: »

I think they pay interest on the 31st March, don't they ? So you wouldn't get any interest just because you happen to withdraw most of the cash in 6 months time.

Note there's a difference between when interest is earned/calculated and when it is paid. Interest is calculated daily, even if it is credited on arbitrary days. So you'd earn interest on an average balance of about £3000 for 6 months, but that wouldn't be credited until end of March. IIRC you'd get half the interest (2%) then, and then the 2% bonus on the anniversary. I'm not sure if they'd flush the 2% interest earned since start of April then, or (more likely) if that would wait until account closure or next end-of-March.

Not quite.

Interest is calculated daily and is added to the account or paid out of the account on 31st march each year, as you say. But, if you closed the account the day after the 12 month anniversary of opening it, you would get the interest plus the bonus.

Example: Account opened 20 February 2012. Interest is added on 31 March 2012. Bonus is added 20 February 2013. Account is closed on February 21 2013. The closure figure would include the bonus plus all interest earned from 31 March 2012.Note that the interest for the period 20 Feb 2012 to 31 March 2012 has already been paid.

psychic_teabag

I think that's mostly what I said, except that you're saying there's some bonus due on account closure. Isn't all the bonus paid on the anniversary ? So the only remaining interest due on closure is the standard interest (2%) since the start of April.

An example where the account is opened in April would possibly be more relevant to people considering opening the account now.

Steve_xx

psychic_teabag wrote: »

I think that's mostly what I said, except that you're saying there's some bonus due on account closure. Isn't all the bonus paid on the anniversary ? So the only remaining interest due on closure is the standard interest (2%) since the start of April.

An example where the account is opened in April would possibly be more relevant to people considering opening the account now.

If you open an account today, then interest will be credited to the account on 31 March 2013 and on 17 April 2013 a further 2% bonus would be credited to the account.

If you then close the account on 18th April 2013 then there would be an additional amount of interest to be credited to the account for the period between 31 March 2013 and April 17th 2013.

murphydavid

Steve_xx wrote: »

Incorrect. There would be a penalty if you closed the account. You would lose out on the 2% bonus. Better to leave £1 in the account until the day after the anniversary of opening it.

Not read the terms but someone said it is a regular saver. If it is the same as a normal regular saver you would not be able to remain at £1.00 because with regular savers you cannot reduce your monthly investment part way through so having got your capital to a pound the next month it would go back to £1 + your regular payment etc. Hence the penalty for closing.
Also if you are going for a regular saver I think you can do better than this. Martins article quotes 8%.