Cahoot introductory rate (from last summer) extended

lswwong

Folks

I am gutted. I had over £10K in my Cahoot account and I moved the bulk out on 28 June to First Direct's eSavings account (5.2% AER). Have just logged into my Cahoot account online and can see the 6 July message. Think I should move my cash back to Cahoot. Any views?

L

PS Big thanks to MarkyMarkD for posting the info here!

alared

Why not!
That`ll be another 3 to 4 days interest you`ve lost.

deemy2004

lswwong wrote:

Folks

I am gutted. I had over £10K in my Cahoot account and I moved the bulk out on 28 June to First Direct's eSavings account (5.2% AER). Have just logged into my Cahoot account online and can see the 6 July message. Think I should move my cash back to Cahoot. Any views?

By transfering your money back to cahoot it will take you 50 days to recoup the lost interest (i.e. the 4 days it takes to put your money back into cahoot).
Now IF this cahoot extention is very temporary and the rate drops to 5.1% .. then on the move out it will take you an additional 204 days to recoup the interest from the First Direct cahoot differential.

So its NOT worth you moving your money back to cahoot, unless they post a message that the 5.65% rate is going to stick around for a while.

lswwong

Thanks Deemy. Thought as much but lack your mathematical finesse!

paulspenceley

deemy2004, how did you work out the maths on that? By my calculations it would take 46 days to recoup the losses.

I'm not trying to be pedantic, I'm just interested how you did the maths in-case I have been calculating my figures wrong all this time!

ffacoffipawb

deemy2004 wrote:

By transfering your money back to cahoot it will take you 50 days to recoup the lost interest (i.e. the 4 days it takes to put your money back into cahoot).
Now IF this cahoot extention is very temporary and the rate drops to 5.1% .. then on the move out it will take you an additional 204 days to recoup the interest from the First Direct cahoot differential.

So its NOT worth you moving your money back to cahoot, unless they post a message that the 5.65% rate is going to stick around for a while.

And don't forget that any withdrawals from the FD account means that no interest is earned that month on that account (so 11 days loss of interest ON THE WHOLE BALANCE if you withdraw ANYTHING, EVEN A PENNY on Monday!)

Leave it there and withdraw on August 1st if need be, but by September 1st I reckon the cahoot rate will be cut, if not slashed!

deemy2004

paulspenceley wrote:

deemy2004, how did you work out the maths on that? By my calculations it would take 46 days to recoup the losses.

I'm not trying to be pedantic, I'm just interested how you did the maths in-case I have been calculating my figures wrong all this time!

5.2% divided by 365 = 0.01425%
0.01425 X 4 = 0.057% - Interest lost.

5.65% minus 5.2% = 0.45%
0.45% divided by 365 = 0.001233%
0.057% divided by 0.001233% = 47 days.

NOW - Do the same calcs for sending the money back from cahoot, but your rates are now 5.1% and 5.2% i.e. a 0.1% difference hence 204 days.

paulspenceley

5.2% divided by 365 = 0.01425%
0.01425 X 4 = 0.057% - Interest lost.

5.65% minus 5.2% = 0.45%
0.45% divided by 365 = 0.001233%
0.057% divided by 0.001233% = 47 days.

Thanks, your maths was a little more elegant than mine, I will change my Excel sheet.