Withdrawing from Fixed Term lump sum deposit

[raven]

Hello,

We put the proceeds of our previous house sale into 12 month fixed term deposits (across 3 banks) and its locked away until February 2010.

We're currently renting and hadn't intended buying until early 2010. However, a house has come up that we like and we're wondering what kind of penalties the banks apply for withdrawing before the term is up?
From what I can tell, they have fairly complex formulae for working it out.
I'm just wondering what kind of ballpark figure it would be?
Basically, would all the interest earned to date (6 months nearly) be shot?

We're pretty OK with waiting (who knows the house may still be available in 6 months) and letting the house go if need be, - just wondering really....

Thanks.....

 

[TSThomas]

Depends on who you're with really, e.g. take [broken link removed];

5. Account Operation
5.1 10% of the deposit can be withdrawn per annum without penalty from the 1 - 5 Year Accounts.
5.2 Withdrawals before the maturity date of the Term of the 1, 3 and 6 Month Accounts are not permitted.

6. Penalties
6.1 Any withdrawals from an Account prior to the maturity date of the Term of that Account (over and above the 10% per annum for 1 - 5 Year Accounts) will result in a breakage penalty for the Account Holder equal to any funding loss incurred by the Bank. This breakage penalty will be calculated using the following formula:

A x B % x C

Where:
A - is the amount withdrawn.
B % - is the difference between the prevailing market interest rate for a term that coincides or is closest to the number of days remaining in the Term, and the interest rate on the Account.
C - is the number of days remaining in the Term.

Northern Rock (as I recall), would penalize 60 days Interest.

 

[MugsGame]

B % - is the difference between the prevailing market interest rate for a term that coincides or is closest to the number of days remaining in the Term, and the interest rate on the Account.

i.e. when interest rates are falling it should cost you little if anything.

 

[sadie]

Also bear in mind that a house sale can take 2 or 3 months or more to go through, so even if you do get the house now, don't go panicking and taking your money out until you absolutely need to.
The closer you are to the fixed term ending the more interest you will get.

 

[raven]

Also bear in mind that a house sale can take 2 or 3 months or more to go through, so even if you do get the house now, don't go panicking and taking your money out until you absolutely need to.
The closer you are to the fixed term ending the more interest you will get.

Good point Sadie, I might even be able to ask for a late closing date and get very close to the end of term.
Thanks