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Kaupthing Edge Break Rate - Reinvest in Bradford Bingley 7% - Worthwhile?
ChloeRadshaw
Posts: 137 Forumite
I m just wondering if anyone knows whether you would be better off closing the Kaupthing Edge account (and taking a hit on the interest rate) and then investing the money in Bradford and Bingley going for the 7%?
I have 38K in Kaupthing Edge earning 6.7% AER (and I would lose 1% AER, which means I would earn 5.7% AER for the period held). I opened this account in February but I ma thinking that it might be worthwhile taking a hit on KaupthingEdge if it means I get an extra 0.3%AER?
Does anyone know whether this is the case and what the amounts would be here
It might be a small amount but I ve been trying to figure out exactly which is better then the other.
Thanks
I have 38K in Kaupthing Edge earning 6.7% AER (and I would lose 1% AER, which means I would earn 5.7% AER for the period held). I opened this account in February but I ma thinking that it might be worthwhile taking a hit on KaupthingEdge if it means I get an extra 0.3%AER?
Does anyone know whether this is the case and what the amounts would be here
It might be a small amount but I ve been trying to figure out exactly which is better then the other.Thanks
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Comments
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http://www.moneysavingexpert.com/savings/savings-accounts-best-interest#saving
Try this to work it out. It depends how far into the future you want to look. Also, without knowing your tax band I can't help much further...
However, reducing your rate by 1%, to get an increased rate of 0.3%, doesn't sound logical to me, unless it's over more than 1 or 2 years..Target Cash Net Worth: £25K by January 2012
Progress May-08 19.0%; May-09 40.0%; May-10 63.0%; May-11 58.4%; Jun-11 58.5%; Jul-11 58.9%; Aug-11 58.7%; Sep-11 59.0%
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Even without attempting to do the math on that it looks like a bad idea.Hope for the best.....Plan for the worst!
"Never in the history of the world has there been a situation so bad that the government can't make it worse." Unknown0 -
What's your tax band, and how long does the KE account last? How long for the B&B?Target Cash Net Worth: £25K by January 2012
Progress May-08 19.0%; May-09 40.0%; May-10 63.0%; May-11 58.4%; Jun-11 58.5%; Jul-11 58.9%; Aug-11 58.7%; Sep-11 59.0%
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Tax band is lower rate - The KE account has been opened for 6 months0
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If it's over 6 months - definitely do not close it! You're near the end so it would certainly not be better if you closed it now.
Incidentally, KE 12 month fixed term deposit account - 7.01% AERTarget Cash Net Worth: £25K by January 2012
Progress May-08 19.0%; May-09 40.0%; May-10 63.0%; May-11 58.4%; Jun-11 58.5%; Jul-11 58.9%; Aug-11 58.7%; Sep-11 59.0%
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LucyTheDwarf wrote: »If it's over 6 months - definitely do not close it! You're near the end so it would certainly not be better if you closed it now.
Incidentally, KE 12 month fixed term deposit account - 7.01% AER
This is the three year fix term so I have a further 2.5 years remaining0 -
Oh, sorry, should have read
In that case, it may be worthwhile closing the account.
Hmm... done a few calculations, even considering the loss of interest in this year, over the 3 years you would be better off by changing, because the compounding makes what looks like a 0.3% increase higher than that.Target Cash Net Worth: £25K by January 2012
Progress May-08 19.0%; May-09 40.0%; May-10 63.0%; May-11 58.4%; Jun-11 58.5%; Jul-11 58.9%; Aug-11 58.7%; Sep-11 59.0%
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LucyTheDwarf wrote: »Oh, sorry, should have read
In that case, it may be worthwhile closing the account.
Hmm... done a few calculations, even considering the loss of interest in this year, over the 3 years you would be better off by changing, because the compounding makes what looks like a 0.3% increase higher than that.
Does anyone know what the difference in this would be on a notional of 38K would be ?0 -
I worked it out very roughly (providing interest rates are fixed) that you'd be around £1300 better off, at Feb 2011, by switching now.Target Cash Net Worth: £25K by January 2012
Progress May-08 19.0%; May-09 40.0%; May-10 63.0%; May-11 58.4%; Jun-11 58.5%; Jul-11 58.9%; Aug-11 58.7%; Sep-11 59.0%
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How come? 1% of £38K is £380 - £1300 would be that times 3 years. Then there's the loss of 0.5% of £38K before you startLucyTheDwarf wrote: »I worked it out very roughly (providing interest rates are fixed) that you'd be around £1300 better off, at Feb 2011, by switching now.
-0.5% + 0.3% + 0.3% + 0.2% is approx + 0.3% [You mean '£130' don't you!].....under construction.... COVID is a [discontinued] scam0
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