Nationwide- Members exclusive bond 5.5% AER

C_Mababejive

Call me a cynic but surely this isnt quite what it seems to be?

Member Exclusive Online Bond | Nationwide

I'm no expert but they put up the headline rate of 5.5% AER then in the T&C it says its actually an 18month fix that you cannot access until the full term has run.

So the next question is, if your maximum 10K is in the account for 18 months, as it must be, what will the total return be in terms of cash and the rate of interest?

I'm not clever enough to work it out

Wheres_My_Cashback

It's exactly what it says it is a Fixed rate account at 5.50% for 18 months where your funds are locked in. What's difficult to understand about that?

allegro120

C_Mababejive said:

Call me a cynic but surely this isnt quite what it seems to be?

Member Exclusive Online Bond | Nationwide

I'm no expert but they put up the headline rate of 5.5% AER then in the T&C it says its actually an 18month fix that you cannot access until the full term has run.

So the next question is, if your maximum 10K is in the account for 18 months, as it must be, what will the total return be in terms of cash and the rate of interest?

I'm not clever enough to work it out

After 18 months you will get approximately £825 in interest. The rate is as stated. 5.5% AER.

lindabea

It's exactly what it says - an excellent rate of interest which is probably the best currently on the market.  If you start by putting in the full £10000, you will get £840.13 in interest after 18 months.  The interest rate is still 5.5%. You get 5.5% interest for the first 12 months then compounded interest of 5.5% in the latter 6 months 

ColdIron

5.50% is AER (Annual Equivalent Rate). It will be paid after 1 year which will compound for another 6 months at AER and paid again

From the link:

• Based on an interest rate of 5.50% AER/gross a year (fixed) for 18 months, your estimated balance would be £1,084.01

lindabea

allegro120 said:

C_Mababejive said:

Call me a cynic but surely this isnt quite what it seems to be?

Member Exclusive Online Bond | Nationwide

I'm no expert but they put up the headline rate of 5.5% AER then in the T&C it says its actually an 18month fix that you cannot access until the full term has run.

So the next question is, if your maximum 10K is in the account for 18 months, as it must be, what will the total return be in terms of cash and the rate of interest?

I'm not clever enough to work it out

After 18 months you will get approximately £825 in interest. The rate is as stated. 5.5% AER.

You get more than £825.  You're not taking into account the magic of compounding interest 

gravel_2

Total return will be just over £840 for the 18 months if you fund day one of opening. Annually that is 5.5% but the total return on the locked cash is 8.4%. This is not a normal way to think about it but seems to be where your confusion comes from.

allegro120

lindabea said:

allegro120 said:

C_Mababejive said:

Call me a cynic but surely this isnt quite what it seems to be?

Member Exclusive Online Bond | Nationwide

I'm no expert but they put up the headline rate of 5.5% AER then in the T&C it says its actually an 18month fix that you cannot access until the full term has run.

So the next question is, if your maximum 10K is in the account for 18 months, as it must be, what will the total return be in terms of cash and the rate of interest?

I'm not clever enough to work it out

After 18 months you will get approximately £825 in interest. The rate is as stated. 5.5% AER.

You get more than £825.  You're not taking into account the magic of compounding interest 

Yes, I forgot about the magic of compounding

slinger2

Opened and funded mine today, matures 4 December 1985 so that's 548 days (365+183). I assume someone who opened it in May will get interest for 549 days (365+184), there being 31 days in May but only 30 in November. Must be a few p difference! or is all this ignored in the Nationwide computer.

trickydicky14

C_Mababejive said:

Call me a cynic but surely this isnt quite what it seems to be?

Member Exclusive Online Bond | Nationwide

I'm no expert but they put up the headline rate of 5.5% AER then in the T&C it says its actually an 18month fix that you cannot access until the full term has run.

So the next question is, if your maximum 10K is in the account for 18 months, as it must be, what will the total return be in terms of cash and the rate of interest?

I'm not clever enough to work it out

C_Mababejive said:

Call me a cynic but surely this isnt quite what it seems to be?

Member Exclusive Online Bond | Nationwide

I'm no expert but they put up the headline rate of 5.5% AER then in the T&C it says its actually an 18month fix that you cannot access until the full term has run.

So the next question is, if your maximum 10K is in the account for 18 months, as it must be, what will the total return be in terms of cash and the rate of interest?

I'm not clever enough to work it out

What do you mean 'this isn't what is seems to be' It's clear it's an 18 month fixed rate bond paying 5.5%

bripat

slinger2 said:

Opened and funded mine today, matures 4 December 1985 so that's 548 days (365+183). I assume someone who opened it in May will get interest for 549 days (365+184), there being 31 days in May but only 30 in November. Must be a few p difference! or is all this ignored in the Nationwide computer.

37 yrs ago wow 😯