Portman Interest Rate and other questions?

montycat_2

Hello,

I have a Portman 2 year fixed Interest Bond taken out 25th May 2006 .

1?Does anyone know what the fixed interest rate was when I took it out ?I have looked on the Nationwide site under the Portman rates section and ,can't find it .

2/Also ,I can close the bond now with ,loss of 90 days interest ,on £15000 what would I lose if I close it now ?
3/What will my final figure be? tt

4/I intend to put £3000 of it into this years ISA allowance ,the rest in a high interest account (Icici) and then in April transfer next years allowance into the ISA .Does this sound a good idea ?

I am useless at maths .

Thank you for your answers

LittleVoice

montycat wrote: »

Hello,

I have a Portman 2 year fixed Interest Bond taken out 25th May 2006 .

1?Does anyone know what the fixed interest rate was when I took it out ?I have looked on the Nationwide site under the Portman rates section and ,can't find it .

2/Also ,I can close the bond now with ,loss of 90 days interest ,on £15000 what would I lose if I close it now ?
3/What will my final figure be? tt

4/I intend to put £3000 of it into this years ISA allowance ,the rest in a high interest account (Icici) and then in April transfer next years allowance into the ISA .Does this sound a good idea ?

I am useless at maths .

Thank you for your answers

1 I think you should find the interest rate on the "bond" document. Is it a passbook? Look inside where it describes the account.

2 What you lose if you close early depends on the interest rate! The maths is multiply 15000 by 0.xxxx (xxxx being the interest rate), divide by 366, multiply by 90. (Examples re interest rate figure: if it is 6.21%, the multiplier becomes 0.0621; 5.5% is 0.055)

3 Again it depends on the interest rate.

4 This year's ISA allowance expires on 5 April. Unless you close early, you won't have it available from this Portman account. Plan otherwise seems OK to me but others may well have better ideas.

quinlanmd

This article:
http://money.independent.co.uk/personal_finance/invest_save/article362446.ece

indicates that Portman raised their 2 year fixed rate to 5% p.a. gross in early May 2004.

montycat_2

I have a passbook and ,the interest rate is not in it .


I will assume it is 5%

Liz_the_Whizz

montycat

I've think I've got the same Portman bond given the maturity date is so close - 2 years fixed rate to 6 June 2008.

The rate on mine is 5.25% - it's printed at the top of the page in my passbook where it shows how much I put in it. Mind you, mine was rolled over from a previous bond so that might explain why it is slightly above 5%.

Although the rate is pretty dismal, I'm just sitting it out to maturity as it's not far off now and I had very little in it. It was the best of a bad Portman lot at the time, and at least it got me my windfall:cool: .

Mind you, by the time it matures in June 2008, with the two predicted base rate cuts, 5.25% will probably be the going rate for a lot of savings;) .

LittleVoice

If the interest was added to the account at the end of year 1 and the rate was 5%, on maturity you would receive £16,537.50 - as long as you don't pay income tax.

On the same basis but for a taxpayer, the amount on maturity would be £16,224.

If you are still thinking of closing early, work out the penalty of 5% for 90 days on £15,750 if you don't pay tax or on £15,600 if you do. You would also be foregoing the interest from closure to original maturity date - so it is not simply a matter of taking the penalty off the maturity values I have indicated. It probably is not worth losing that amount of money given the rates of interest available elsewhere.

montycat_2

Thanks for the help ,

5.25% sounds about right .

I appreciate there will be a loss ,but I could use some of the funds sooner (long story) .

I will ask definatively in the Nationwide .At least now I have a rough idea of how much I am dealing with .