Loss of interest on notice accounts

When a savings account says you have to give 60 days notice or loss of interest, what does 60 days loss of interest actually mean?

Does it mean the last 60 days, ie you'd get interest you earned up till 60 days ago, does it mean 60 days at the current interest rate, or something else like the average rate since the last time you were paid interest? The T&C's don't make it clear.

I'm trying to work out whether I'd be better off giving notice or not.

TIA.

Reply to
Andy Pandy
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What I would expect it to mean is that if you do give 60 days notice, then the amount you withdraw will continue to earn interest until it is withdrawn, i.e. during the notice period, but that if you don't, then it won't. Think of loss of interest as being the consequence of "forgetting" to give notice.

This generalises: Giving 60 days notice and giving no notice are not the only two options (unless the T&Cs say that 59 days notice or less is equivalent to no notice). You might be able to give, say, 20 days notice. What I would expect then is that the money will continue to earn interest during the 20 days prior to withdrawal, but not during the 40 days before you gave 20 days notice.

I'd expect the interest rate at which the deduction is made to be that which applied during those particular days in question. In other words I'd expect it to work as if the bank pretended that the money was withdrawn from the main account 60 days before you actually get it, however much notice you give, and shoved into a holding account in which earns no interest unless and until you give notice.

That depends on what you're going to do with the money. If you're going to reinvest it elsewhere, and can do so immediately and at a better interest rate than you'd be losing, then you might as well withdraw it immediately with no notice. Same if you really need or wish to spend it immediately, the consequences of delaying the spending being -in your view- worse than losing the interest.

But if you're going to spend it, and can schedule the spend in advance, you should give notice immediately, intimating the particular time frame your schedule will determine.

Reply to
Ronald Raygun

Yes.

It's what I'd expect too - but it doesn't seem to state that anywhere and I very much doubt the any branch/call centre staff would have a clue. I guess a letter will be needed but that's just more time...

I want to put into a fixed rate bond paying 3.3%. Currently it's earning 1.25%, but 60 days ago it was probably about 2.25%. Average probably about 1.75% over the 60 days, but maybe 4% over the last year. If the loss of interest is the last 60 days (or even better the current rate) then it looks like it's best not to give notice, as I'd gain more interest than I'd lose. But if they use a calculation based on, say, the average interest rate over the last year, then I'd lose not giving notice....

Reply to
Andy Pandy

It can get even more complicated. If you give notice, then during the

60 day waiting time, the 3.3% bonds might be suddenly withdrawn without notice, to be replaced by a new batch at a lower interest rate.
Reply to
Ronald Raygun

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