Shawbrook 6 month fixed 2%

CheekyMikey

Interest can be paid monthly at 4.41% on the new 1 yr fixed bond…but does this mean it can be paid out to a nominated account? It appears to say no withdrawals allowed as it’s a fixed bond, but why would you opt for slightly lower monthly rate if interest can’t be withdrawn?

Ultrasonic

CheekyMikey said:

Interest can be paid monthly at 4.41% on the new 1 yr fixed bond…but does this mean it can be paid out to a nominated account? It appears to say no withdrawals allowed as it’s a fixed bond, but why would you opt for slightly lower monthly rate if interest can’t be withdrawn?

One reason could be to spread when the interest is earned across two tax years.

Old_Slaphead

CheekyMikey said:

but why would you opt for slightly lower monthly rate if interest can’t be withdrawn?

When compounded it should equate to 4.5%

CheekyMikey

Old_Slaphead said:

CheekyMikey said:

but why would you opt for slightly lower monthly rate if interest can’t be withdrawn?

When compounded it should equate to 4.5%

Yes I get that, but other than the tax reason Ultrasonic mentions, there really is no benefit to choosing monthly interest option with these fixed term accounts is there? Not sure I’ve seen any which actually allow you to take the interest as monthly income, which would be ideal…

JGB1955

CheekyMikey said:

Old_Slaphead said:

CheekyMikey said:

but why would you opt for slightly lower monthly rate if interest can’t be withdrawn?

When compounded it should equate to 4.5%

Yes I get that, but other than the tax reason Ultrasonic mentions, there really is no benefit to choosing monthly interest option with these fixed term accounts is there? Not sure I’ve seen any which actually allow you to take the interest as monthly income, which would be ideal…

I have three Paragon fixed rate bonds all of which pay out monthly interest to my linked current account.

Ultrasonic

CheekyMikey said:

Old_Slaphead said:

CheekyMikey said:

but why would you opt for slightly lower monthly rate if interest can’t be withdrawn?

When compounded it should equate to 4.5%

Yes I get that, but other than the tax reason Ultrasonic mentions, there really is no benefit to choosing monthly interest option with these fixed term accounts is there? Not sure I’ve seen any which actually allow you to take the interest as monthly income, which would be ideal…

Some do as per the example above but the downside is that then you do lose out on interest as a result. So someone should only ever do this if they need the income of the interest during the term.

JGB1955

Ultrasonic said:

Some do as per the example above but the downside is that then you do lose out on interest as a result. So someone should only ever do this if they need the income of the interest during the term.

.... or can reinvest the interest at a higher rate.  Some of my interest is being paid at 0.7%.  By withdrawing it I can then re-invest that at 5%.

Ultrasonic

JGB1955 said:

Ultrasonic said:

Some do as per the example above but the downside is that then you do lose out on interest as a result. So someone should only ever do this if they need the income of the interest during the term.

.... or can reinvest the interest at a higher rate.  Some of my interest is being paid at 0.7%.  By withdrawing it I can then re-invest that at 5%.

That's a fair point actually whilst interest rates are rising. Not that accounts you could make monthly payments to earning 5% interest are common (they're just tied to current accounts I thought?)

Cammie50

CheekyMikey said:

Interest can be paid monthly at 4.41% on the new 1 yr fixed bond…but does this mean it can be paid out to a nominated account? It appears to say no withdrawals allowed as it’s a fixed bond, but why would you opt for slightly lower monthly rate if interest can’t be withdrawn?

I’ve also been looking at reinvesting in this account when my Shawbrook 6 monthly bond matures end of November….but cannot see anywhere in the details that monthly interest can be paid out into my nominated bank account. They state that no withdrawals are allowed until duration of the term so does that mean the monthly interest is paid into the bond account itself…but cannot be withdrawn until end of term. Makes no sense…or am I missing something? 

Ultrasonic

Cammie50 said:

CheekyMikey said:

Interest can be paid monthly at 4.41% on the new 1 yr fixed bond…but does this mean it can be paid out to a nominated account? It appears to say no withdrawals allowed as it’s a fixed bond, but why would you opt for slightly lower monthly rate if interest can’t be withdrawn?

I’ve also been looking at reinvesting in this account when my Shawbrook 6 monthly bond matures end of November….but cannot see anywhere in the details that monthly interest can be paid out into my nominated bank account. They state that no withdrawals are allowed until duration of the term so does that mean the monthly interest is paid into the bond account itself…but cannot be withdrawn until end of term. Makes no sense…or am I missing something? 

I'm sure the answer must be buried somewhere in the terms and conditions if you fancy wading through them (I don't) but you may find it easier to contact Shawbrook to ask.