12 month bond - was it a mistake?

bristolleedsfan

Hungerdunger wrote: »

I'm not aware of any that don't pay anything out until maturity.

Whilst it has been posted before, can someone please re-clarify why Kaupthing Edge 3 Year Fixed Rate Account has an A.E.R of 6.70% despite having a quoted Gross rate of 7.16%. :drool:


http://www.kaupthingedge.co.uk/OurProducts/InterestRates.aspx

earlgrey_3

bristolleedsfan wrote: »

Whilst it has been posted before, can someone please re-clarify why Kaupthing Edge 3 Year Fixed Rate Account has an A.E.R of 6.70% despite having a quoted Gross rate of 7.16%. :drool:

http://www.kaupthingedge.co.uk/OurProducts/InterestRates.aspx

Would have to read through all the bumph, but is the interest only paid at the end of the 3 year term by any chance and not compounded annually?

tradetime

I took the Co Op 12 month fixed rate also, along with a range of other fixed terms from other providers varying in duratiion from 6 to 24 months and have no regrets, with a stalling economy the BOE will be loathed to raise IR's too soon or quickly, and will likely suffer the inflation pressure. With the benefit of hindsight, I could have got a few 1/10ths % better on some products, but then hindsight is always 20/20. I did opt for the Leeds Inflation buster as well, in case the boe let infation run away, at least something will be holding it's own.
I think one can only strive to do the best with the information to hand and settle for that.

Greycrow

As a part of my overall investments, I'm quite happy with my investment in the Co-Op bond.

Primrose

I don't think you made a mistake to fix for 12 months, although of course to a certain extent it depends how much money you have tied up. If it was around the £5000 mark, the lost interest is probably not worth losing sleep over. If, on the other hand, you had tied up £250,000, then the lost interest would be a little more serious. But I suspect quite a few of us have tied money up for 12 months in the recent past on the fear of falling interest rates, and if you've done your research and have got a reasonable rate, it's probably not worth trying to untangle the arrangements. There will always be a better rate coming along sooner or later in the savings world - nobody will make the best judgement call 100% of the time.