is it a 12 or 13 month bond??

lindos90

Hi, im hoping for some advice, Im in my first attempts of reviewing my finances, assisted by MSE!!

Opened a fixed rate 12 month bond at A&L at the weekend, (the assistant said she would hold onto the cheque and process it on tuesday-6th may, as the intrest rate was due to increase slightly, so gave her my cheque for 4K.)

I assumed that if the bond is for twelve months that it would logically mature on 5th may 2009..however

Today I recieved the bond certificate confirming the 4K deposit, it says the interest payment will be 1st may 2009, and it will mature 1st june 2009.

This may be banking standard, and just my inexperience, but does this mean I have to keep the money in the bond for 13 months, but only get 12 months interest??

What is even more puzzling is that my TSB account is still showing my 4K, so an alternative explanation could be that they will start the bond on 1st june to make 12 complete months.

I will try and get into the bank and enquire at som point (difficult though discussing the ins and outs of bond detail with three kids in tow!!, however I do value and respect the amazing wealth of knowledge my fellow MSers can offer.;)

bristolleedsfan

You will get interest paid on 1st May 2009 and then again on 1 June 2009 for the period from the last interest payment until 1 June 2009.

The term is nearly 13 months, u wont lose any interest, Your TSB account will be debited either on friday or early next week depending on how quickly A+L banked the cheque.

https://www.emoneyfacts.co.uk/news/savings-news.aspx?newsarticleid=170833

1 Year FIXED RATE BOND: a fixed term account maturing 1.6.09 with a minimum investment of £1K (£2.5K for monthly option) paying 6.65% yearly (6.45% monthly). New money to institution only. Earlier access on 180 day loss of interest. No additions permitted.

lindos90

Hi thanks bristol,
It just seems really premature that they have already sent me a bond when they have not cashed the cheque, for all they know the cheque could bounce! (although im sure they have a charge for that!):rolleyes:
The bond I assume is like a reciept, and is my only proof that Ive given them the money, apparently if I loose it I have to pay for another one!

The_Fiddler_2

Do A&L often pay interest on 1st May, I noticed my regular saver received interest then as well although there is still a couple of months to go on it.

bristolleedsfan

lindos90 wrote: »

Hi thanks bristol,
It just seems really premature that they have already sent me a bond when they have not cashed the cheque, for all they know the cheque could bounce! (although im sure they have a charge for that!):rolleyes:
The bond I assume is like a reciept, and is my only proof that Ive given them the money, apparently if I loose it I have to pay for another one!

When somebody deposits a cheque at a branch they get a receipt and/or passbook updated despite fact cheque could bounce.

Unless someone really needs the funds after 12 months, these high fixed rates lasting 13 months or in the case of Chelsea BS, 14 Months can be very advantageous when rates are in decline. (obviously opposite when rates are rising) My main reason for going with Chelsea 6.9% one year fix in january was that it lasts until 3rd week in March 2009, same as A+L interest is paid at a certain date and then again on maturity. :j

Television licences get issued immediately, then revoked if either cheque bounces or direct payment is returned unpaid.