MSE's Shawbrook 6-month bond via Flagstone at 2%

Scarlet.1

Hi all
I saw Shawbrook's 6-month bond at 2% (via Flagstone) on here at the end of June. I went through via MSE and opened the bond with my savings assuming I would be getting 2% on my investment. I checked my balance today and the return is only 1%. I emailed and have been told that's because the actual rate they were offering was 2% per ANNUM, not 2% for 6 months, so you only get a 1% return, not 2%. I don't remember when I signed up for it seeing anything about 2% being the annual rate and 1% being the 6-month rate. So is this the norm? That if you invest in a 6-month bond, the rate advertised applies to 12 months and not 6?

eskbanker

Duplicate of https://forums.moneysavingexpert.com/discussion/6395717/flagstone-shawbrook-2-6-month-bond-on-mse-is-not-2-pe

Krakkkers

If what you believed was true why would anyone take out a 5 year deal at 4%, do you believe that the total return over 5 years is 4%?

cloud_dog

Scarlet.1 said:

Hi all
I saw Shawbrook's 6-month bond at 2% (via Flagstone) on here at the end of June. I went through via MSE and opened the bond with my savings assuming I would be getting 2% on my investment. I checked my balance today and the return is only 1%. I emailed and have been told that's because the actual rate they were offering was 2% per ANNUM, not 2% for 6 months, so you only get a 1% return, not 2%. I don't remember when I signed up for it seeing anything about 2% being the annual rate and 1% being the 6-month rate. So is this the norm? That if you invest in a 6-month bond, the rate advertised applies to 12 months and not 6?

Really not sure what to say.  It was 2% APR (Annual Percentage Rate), or 1.92% monthly interest (I think).

Interest rates (from reputable companies) are always expressed as annual percentage rates.

ranciduk

Yup I fell for it too

Luckily I realised my mistake before I deposited all the money I was actually going to put in it

so yep, 6 months wasted

EthicsGradient

The Shawbrook 6 month bond was, around June, as good as you'd get for 6 months. So you've not lost anything at all, just not got the amazingly great deal you thought were getting. Nothing has been "wasted", or "fallen for".

kaMelo

Fell for what?
Interest rates on savings accounts are always quoted annually, either APR or AER (for compounded interest)  it's a regulatory requirement to do so allowing consumers to compare accounts

Every pound deposited in the account has earned 2% APR for every day it was in there, no one fell for anything.

wiseonesomeofthetime

It's akin to the frequent misunderstanding around regular savers 🤷‍♂️

refluxer

You've had an interest rate of 2% for the last 6 months and not 1%. The account was a good option at the time and, FWIW, here's my take on why that is...

In early June, the best Easy Access account was an outlier paying 1.5% (Chase) and the best of the rest were around 1.1 to 1.3%. It's only in the last 6 weeks or so that the best Easy Access accounts have broken through the 2% mark so, overall, the 6 month fix will probably have been the better option of the two during the last 6 months (and you haven't had the hassle of having to switch easy access accounts every few weeks to get the best rates !)

If you'd considered taking out a 1 Year Fixed Rate instead back in early June, the best option was 2.4%. If you'd taken that out, you'd be stuck on that for another 6 months whereas having gone for the Shawbrook 6 month fix instead means you'll most-likely be able to fix at not far-off double that with the best 1 year fix when your 6 month fix matures. (There are two more BoE meetings before the end of the year, where further rate rises are anticipated).

So... IMO, the Shawbrook 6 month deal at 2% was actually a great option for anyone considering that type of account who was expecting further rises and not wanting to lock their money away for a whole year, but equally not wanting a large sum to sit in an Easy Access account while waiting for those rate rises. Note that Shawbrook actually dropped the rate of their 6 month fix to 1.75% not long after you took yours out at 2% which, in a year that has mainly seen rates rising, is another indication that it was a good deal at the time.