Interest in fixed saving account changed few days after I opened it - can I ask for an adjustment? (

Alicon88

Doctor_Who said:

Alicon88 said:

ForumUser7 said:

Alicon88 said:

Hi

I would like to know your opinion.

I opened at the beginning of July this year a 1 year fixed rate saving account with Lloyds Bank in the UK. At that point, the interest rate was 5% (pretty decent).

Only a few weeks after, the interest rate has gone up to 5.5% with the same kind of account but obviously, mine has not changed.

While I do understand that these are called fixed for a reason, do you think there is any room for asking for an adjustment of my current interest rate with the one now available? Or will the answer be irrevocably NO?

What do you think? Am I just a delusional?

Thanks

OP, is this the existing customer ISA, or a bond?

To echo others, very unlikely they’ll increase the rate. But with the ISA you could transfer with a penalty if rates go up much higher in the future. At this stage, likely the cost of the 90 day penalty would be more than the gain from the new rate though, and I wouldn’t think this was a good move.


Edit, seems to be possible to close bond too with 90 day penalty, but would refer you to summary box for all options and to work out how to do this if you wanted to in the future. Also refer to your account specific documentation, in case Lloyds penalties change in the future.

the 90 days penalty meaning they will calculate 3 months on the interest on the amount of money I deposited and with the interest rate of 5% and will charge me with that?

sorry if it's stupid question, not really an expert about these matters

Yes, the penalty will be ~1/4 of the yearly interest you would earn. Hence, you need to decide if the new account pays enough extra interest to make it worthwhile to switch.

Edit: I see you've asked the same question in another thread and had the same answer. You can use the ISA calculator (you can use this for a non-ISA fixed rate bond) to see how switching to different accounts and paying the penalty might be better or worse for you.
thank you.

wasn't sure I understood correctly.

phillw

ForumUser7 said:
At this stage, likely the cost of the 90 day penalty would be more than the gain from the new rate though, and I wouldn’t think this was a good move.

It's been less than 90 days, I'm not sure if they would charge you more of a penalty than you earned in interest.

If they just don't give you any interest, then at a rough estimate you're throwing away 1/12th of the 5% which is 0.416%.
.

Dave_5150

You can ask and they can refuse (if they reply at all). 

Doctor_Who

phillw said:

ForumUser7 said:
At this stage, likely the cost of the 90 day penalty would be more than the gain from the new rate though, and I wouldn’t think this was a good move.

It's been less than 90 days, I'm not sure if they would charge you more of a penalty than you earned in interest.

If they just don't give you any interest, then at a rough estimate you're throwing away 1/12th of the 5% which is 0.416%.
.

From the Summary Box on the Lloyds website for the current fixed rate bonds (the OP would need to check the T&Cs for the actual bond they opened):

You can’t make withdrawals from this account, but you can close the account early by visiting one our branches with a counter. Bear in mind that if you close the account early, for the one year term account you’ll be charged the equivalent of 90 days’ gross interest. For the two year term account you’ll be charged the equivalent of 180 days’ gross interest. This means you may get back less than you put in.

https://www.lloydsbank.com/savings/online-fixed-bonds.html

Alicon88

They said there is the 90 days gross interest penalty, so I guess it's not really worth it.