Skipton BS members account

canaldumidi

I have a Bonus Saver account and on the basis of this was able to open a Members Regular Saver.

If I close the Bonus Saver (interest rate dropping), does that impact on the Regular Saver?

xylophone

I don't see why it should - you opened the saver on the basis of being a member and you are still a member  if you have only a RS. 

That said, I shall keep my bonus account open with a small balance - it will be  easy to transfer in  my RS maturity proceeds and apart from that, there might be better offers coming up from Skipton? 

wiseonesomeofthetime

Kept mine open for the Halifax debit card deposits (and withdrawals) to meet that account's T&C's.

Useful to keep open, with nominal £1, even if you don't use it for debit card deposits.

Skipton_Building_Society_Representative

canaldumidi said:

I have a Bonus Saver account and on the basis of this was able to open a Members Regular Saver.

If I close the Bonus Saver (interest rate dropping), does that impact on the Regular Saver?

Morning! Providing you open and fund the Regular Saver first, then you're free to close the Bonus Saver. This wouldn't have an impact on your Regular Saver. Hope this helps!

canaldumidi

xylophone said:

I don't see why it should - you opened the saver on the basis of being a member and you are still a member  if you have only a RS. 

That said, I shall keep my bonus account open with a small balance - it will be  easy to transfer in  my RS maturity proceeds and apart from that, there might be better offers coming up from Skipton? 

True, but if I'm moving the money elsewhere I'd rather compound up the interest by closing the account. Can always open a new account if Skipton launch  new rate.

Thanks Skipton Rep!

Daliah

canaldumidi said:

True, but if I'm moving the money elsewhere I'd rather compound up the interest by closing the account. 

Can you explain what you are gaining by closing the account, as opposed to moving most of your balance to somewhere else? How does compounding come into it? 

canaldumidi said:

 Can always open a new account if Skipton launch  new rate.

May be you can, may be you can't. The account with the new rate might be an exclusive for existing members, like their most recent one was.

xylophone

The account with the new rate might be an exclusive for existing members, like their most recent one was.

He's keeping the RS so will still be a member.

canaldumidi

Daliah said:

canaldumidi said:

True, but if I'm moving the money elsewhere I'd rather compound up the interest by closing the account. 

Can you explain what you are gaining by closing the account, as opposed to moving most of your balance to somewhere else? How does compounding come into it? 

canaldumidi said:

 Can always open a new account if Skipton launch  new rate.

When the account is closed, interest is added (earlier than would be the case if the account remained open) and thus compounded into whatever account it is moved to, effectively increasing the AER..

spider42

canaldumidi said:
When the account is closed, interest is added (earlier than would be the case if the account remained open) and thus compounded into whatever account it is moved to, effectively increasing the AER.

Yes, but the interest has already just been added to the account. If you've withdrawn the balance down to £1 as soon as the bonus ended (which is the same time that the interest has been added), then the accrued interest since the last interest payment date and the date of closure on £1 will be miniscule. So the compounding would make no difference whatsoever in practical terms.

With interest rates as low as they are currently, compounding is pretty much irrelevant. Let's say you have an instant access account paying 0.5%. You could, in theory, close it each day and open another one, to get the interest added to the account daily. Daily interest = 0.5%/365 = 0.001369863% per day. Compound interest rate over the year (AER) is (1.00001369863)^365 -1 = 0.5012486%.

So if you artificially compounded the interest every single day, it would only add 0.0012485% to the annual return. If you had £1 million in the account, this would make an extra £12.48 interest per year. Hardly worthwhile is it?

canaldumidi

well,no, interest hasn't been added and bonus rate hasn't ended - but I take your point as it soon will.

Daliah

canaldumidi said:

well,no, interest hasn't been added and bonus rate hasn't ended - but I take your point as it soon will.

The bonus rate expired on September 16, and the application window was very short as the account was immensely popular. If your account hasn't reached its anniversary yet, it will do any day now. Unless you are not talking about the Skipton online bonus saver 7 but I don't know of another Skipton instant access account with a bonus rate.