First Direct regular saving question

carly

I have a FD regular saving account with one more payment due to come out.  Current value   £3300 as I pay in £300 per month.  I need some cash for a car purchase.  How much interest will I lose if I withdraw the whole amount now and close the account, rather than waiting for it to mature ? Thanks.  

dealyboy

Hi carly ...

I don't know what your current rate is but £136.50 @7% if you let it run.
If you cash in early you get 1.2% (current savings account rate) so about £20 after 11 months' payments.

carly

Thanks,  if I lose that much interest then I'd rather withdraw the money from a different account. 

oldcodger69

First Direct Regular Savings currently state: Interest example: If you save £300 every month for 12 months and qualify for the 7.00% AER/Gross p.a. interest rate, you'll earn approximately £136.50 interest (gross). Interest is calculated daily and paid 12 months after you opened the account. 

By my calculations £136.50 is 3.79% of £3600.  Alternatively 7% of £3600 is £250.00

Given that FD calculate the interest daily, presumably the first payment receives 365 days interest @ 7%PA and the final payment e.g.30 days @ 7%PA.

The Devil seems to be in the detail...!

Tim

brucefan_2

oldcodger69 said:

First Direct Regular Savings currently state: Interest example: If you save £300 every month for 12 months and qualify for the 7.00% AER/Gross p.a. interest rate, you'll earn approximately £136.50 interest (gross). Interest is calculated daily and paid 12 months after you opened the account. 

By my calculations £136.50 is 3.79% of £3600.  Alternatively 7% of £3600 is £250.00

Given that FD calculate the interest daily, presumably the first payment receives 365 days interest @ 7%PA and the final payment e.g.30 days @ 7%PA.

The Devil seems to be in the detail...!

Tim

Given that the final payment is only actually in the account for 30/31 days, then yes, it will only earn interest at the advertised rate for 30/31 days..

The 'final payment' cannot earn interest during the period of time it is not in the account.

allegro120

carly said:

I have a FD regular saving account with one more payment due to come out.  Current value   £3300 as I pay in £300 per month.  I need some cash for a car purchase.  How much interest will I lose if I withdraw the whole amount now and close the account, rather than waiting for it to mature ? Thanks.  

"Our Regular Saver Account is for 12 months so, as you'd expect, you can only withdraw your money after a year. You can access your money before then, but you'll have to close the account. If you choose to do this. we'll pay interest up to that day and you'll receive interest equivalent to our Savings Account variable rate"

"Our Savings Account lets you save anything from £1 to infinity and gives you an interest rate of 2.00% AER (1.98% Gross)."

According to this if you withdraw now you will get about £60 interest, it you carry on and make your final payment payment you should get £136.