Trying to extract money from a 2 year Fixed Rate account

[terminal7]

About a year ago I clearly made the wrong call and put a lot of spare cash in a 2 year fixed rate account at 4.51%. I have approached the financial institution asking whether there was anyway to withdraw my money - assuming that they would say yes but with a penalty etc. I just received the following reply

Dear Mr T7, Thanks for your secure message. I understand that you would like to request an early withdrawal. Under the terms and conditions of your 2 Year Fixed Rate account, no withdrawals or closures are permitted until the maturity date of 13/10/2024. We are unable to consider a loss of interest in lieu of an early closure. In exceptional circumstances we may permit early withdrawals from or closure of the account prior to the maturity date but this is at our discretion, subject to evidence we will request and we are not obliged to do so. In the event that we grant permission, we may deduct 180 days interest as a condition. This will then be reviewed accordingly. Please send any supporting evidence as well as reasoning of an early withdrawal to our address below

I assume that all I can do at leisure over the next year is moan into my soup about get this call wrong. My exceptional circumstance is seeing rates at 1% and over above my fixed rate - not sure this would get any sympathy.

T7

[BullDog]

Clearly caveat emptor applies. Sorry to hear about the issue.

[BigB]

About a year ago I clearly made the wrong call and put a lot of spare cash in a 2 year fixed rate account at 4.51%. I have approached the financial institution asking whether there was anyway to withdraw my money - assuming that they would say yes but with a penalty etc. I just received the following reply

Dear Mr T7, Thanks for your secure message. I understand that you would like to request an early withdrawal. Under the terms and conditions of your 2 Year Fixed Rate account, no withdrawals or closures are permitted until the maturity date of 13/10/2024. We are unable to consider a loss of interest in lieu of an early closure. In exceptional circumstances we may permit early withdrawals from or closure of the account prior to the maturity date but this is at our discretion, subject to evidence we will request and we are not obliged to do so. In the event that we grant permission, we may deduct 180 days interest as a condition. This will then be reviewed accordingly. Please send any supporting evidence as well as reasoning of an early withdrawal to our address below

I assume that all I can do at leisure over the next year is moan into my soup about get this call wrong. My exceptional circumstance is seeing rates at 1% and over above my fixed rate - not sure this would get any sympathy.

T7

Technically yes, you think you made the "wrong" call, but I'd argue you did broadly the right thing and that possibly you are out by a margin (not a factor), maybe a little timing, and that getting frustrated over the 1% you might have had is borderline-fussy - I'm guessing you've made calls like this before and got them much closer.

The real "wrong" call would have been to languish in some account with barely any interest - there will be numerous people who have done so and with considerable 5 and 6 figure sums of cash.

[GeoffF100]

Nobody knows future interest rates. The markets and the central banks got it wrong. Vanguard LifeStrategy or your local IFA would have had you in bonds of about 10 years duration. You did well to have a 2 year bond. If interest rates had gone down rather than up, you would be losing out on a higher rate of interest for a longer period. It is possible to be unhappy whatever happens.

[DrFfybes]

I assume that all I can do at leisure over the next year is moan into my soup about get this call wrong. My exceptional circumstance is seeing rates at 1% and over above my fixed rate - not sure this would get any sympathy.

T7

Rates go up, rates come down. You pays your money, yo makes your choice.

I suspect were you to fix now at 5.5% and then find that in 12 months the same account was available at 3% you would not be making a similar request.

[Maroochydore]

About a year ago I clearly made the wrong call and put a lot of spare cash in a 2 year fixed rate account at 4.51%.
....I assume that all I can do at leisure over the next year is moan into my soup about get this call wrong. My exceptional circumstance is seeing rates at 1% and over above my fixed rate - not sure this would get any sympathy.

Don't worry, I'll make you feel better. June 2022 I also made the wrong call. I put £50,000 in the leading (at the time) 2 year fixed rate deal at 2.85%

Like you, I was aghast when shortly afterwards interest rates rocketed and tried to extract myself with the offer of lost interest etc.

Seems Hodge Bank will only accept death and another extreme excuse to release me so, like you, I sit and watch ruefully as same Bank now offer 5.96% on a 1 year deal.

Such is life and the wonder of hindsight.

[stevensfo]

About a year ago I clearly made the wrong call and put a lot of spare cash in a 2 year fixed rate account at 4.51%.
....I assume that all I can do at leisure over the next year is moan into my soup about get this call wrong. My exceptional circumstance is seeing rates at 1% and over above my fixed rate - not sure this would get any sympathy.

Don't worry, I'll make you feel better. June 2022 I also made the wrong call. I put £50,000 in the leading (at the time) 2 year fixed rate deal at 2.85%

Like you, I was aghast when shortly afterwards interest rates rocketed and tried to extract myself with the offer of lost interest etc.

Seems Hodge Bank will only accept death and another extreme excuse to release me so, like you, I sit and watch ruefully as same Bank now offer 5.96% on a 1 year deal.

Such is life and the wonder of hindsight.

Via AJBell, I've been constructing a ladder of 2-yr fixed rate accounts opened every month, that I plan to renew every 2 years. i.e. total 24 accounts. A smaller sum than you, but yes, it's interesting to compare rates when I started with the rates I'm getting now. I like everything to be simple and straightforward, so it's also a bit irritating that recently, 1-year accounts seem to be better than the 2-yrs.

I guess there are various ways of looking at it. I tend to compare the saving rates with the RPI/CPI and think of it in terms of how much the cash is losing in real terms over 2 years. If inflation continues to come down, it may not be as bad as feared earlier in the year.

Steve

[Dod101]

You entered into a contract. Now you don't like its terms so want to renege on it. The other party says no. Why should they do otherwise?

Dod

[Gerry557]

On viewing the headline my thought were, just close the account.

Obviously not possible and I assume you were aware of this on opening. I suppose "for a better rate" isnt the good reason they might cave as opposed to a medical emergency that might save my life.

You have another year earning decent if not great rates and it might start to look better if other rates fall. It wasn't the wrong call just the slightly wrong atm call

[bluedonkey]

Eeeh, takes me back 50 years. Had a 11 months notice account with the Julian Hodge Bank. Wrote to them pleading to be allowed to take it out earlier but can't remember why I wanted the money. They refused.

[Stompa]

Fixed rate accounts that permit early withdrawals (on payment of some sort of penalty) used to be relatively common, but a quick check seems to suggest that they've pretty much disappeared now.

[bluedonkey]

I had a Nationwide ISA paying 0.5% that allowed me to withdraw a couple of months ago with 6 months loss of interest.

[Stompa]

I had a Nationwide ISA paying 0.5% that allowed me to withdraw a couple of months ago with 6 months loss of interest.

Yes, you can find ISAs that allow early withdrawal, but it's not so easy to find a non-ISA these days.

[AJC5001]

I had a Nationwide ISA paying 0.5% that allowed me to withdraw a couple of months ago with 6 months loss of interest.

Yes, you can find ISAs that allow early withdrawal, but it's not so easy to find a non-ISA these days.

My understanding from watching/reading Martin Lewis (Moneysavingexpert) is that the ISA regulations say that there must be an early withdrawal option, although some forfeit of interest is allowable.

Doesn't apply to non-ISA accounts.

Adrian

[Magnets]

Virgin money 1yr fixed rate ISAs only have a 60 day interest penalty and allow partial withdrawal, they are pretty much the best compromise on rate/availability.

Their 2 year offering was 90 (or 180?) days penalty but seems to have been pulled recently.