OakNorth Bank: worse rate for locking away longer?

kitchensinq

On the OakNorth Bank site...if you click the different time periods (6 / 9 /12 months etc) it seems they offer worse rates if you lock your money away for longer than 6 months. Wouldn't you expect *better* rates if you lock away for longer periods? What am I missing here?

bristolleedsfan

kitchensinq said:

On the OakNorth Bank site...if you click the different time periods (6 / 9 /12 months etc) it seems they offer worse rates if you lock your money away for longer than 6 months. Wouldn't you expect *better* rates if you lock away for longer periods? What am I missing here?

Savings Guru reported as saying in Mail Money most popular terms accounts based on searches on its website are 12 month and 60 months with very little interest in other term lengths, Oaknorth top 2 highest paying rates are 12 month and 60 months.

https://oaknorth.co.uk/personal-savings/fixed-term/#how-long-can-you-lock-your-savings-away?

masonic

The rate reflects their expectation of what rate they can lend the money. If they cannot lend for the exact term you choose, and have to re-lend the funds part way through the term at a lower rate, that would result in the outcome you've observed.

mebu60

kitchensinq said:

On the OakNorth Bank site...if you click the different time periods (6 / 9 /12 months etc) it seems they offer worse rates if you lock your money away for longer than 6 months. Wouldn't you expect *better* rates if you lock away for longer periods? What am I missing here?

That they expect rates to fall.

bristolleedsfan

kitchensinq said:

On the OakNorth Bank site...if you click the different time periods (6 / 9 /12 months etc) it seems they offer worse rates if you lock your money away for longer than 6 months. Wouldn't you expect *better* rates if you lock away for longer periods? What am I missing here?

Unless my eyes deceive me 6 months is shortest term/lowest rate they offer.

Johnjdc

kitchensinq said:

What am I missing here?

The downward sloping yield curve.

http://www.yieldcurve.com/marketyieldcurve.htm

Albermarle

kitchensinq said:

On the OakNorth Bank site...if you click the different time periods (6 / 9 /12 months etc) it seems they offer worse rates if you lock your money away for longer than 6 months. Wouldn't you expect *better* rates if you lock away for longer periods? What am I missing here?

In a stable interest rate environment, yes you would normally expect a premium for locking your money up for longer.
However the long term outlook is that interest rates will reduce.
So the premium is 'lost' and by fixing for longer, say a few years, you are hoping to benefit by that  the fixed rate will be a lot better than you could  get in the market then. 

LizRMR

I have tried to contact OakNorth Bank in order to action withdrawal from a notice account. There was no obvious way to do this on the transactions/statement pages online.I have had no reply to an email and they don't answer the phone.  I am worried. Should I be??

NameWithheld

Can't remember doing it online but it is very easy to do it in the app

Shedman

LizRMR said:

I have tried to contact OakNorth Bank in order to action withdrawal from a notice account. There was no obvious way to do this on the transactions/statement pages online.I have had no reply to an email and they don't answer the phone.  I am worried. Should I be??

No need to worry about OakNorth.  They're definitely still around. They do take a while to answer emails though.

Do you use the OakNorth app as that definitely has options to Add Money, Move Money or Withdraw.  However the last two won't appear if you have already given notice on all of the money currently in the account (see 2nd photo) so I normally leave a £1 in there. You can cancel a Withdrawal by clicking the Minus symbol alongside and then the options will reappear.

Rudyson

Go to the view page of the account, and there's a withdraw option in the top right.