# KBC dropping fixed rates this week



## fuzzy10 (25 Feb 2013)

Spoke to a bank rep today. KBC are planning to cut term- deposits this week.


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## Lightning (26 Feb 2013)

Thanks for the heads up. Now might be a good time to get the KBC 3.00% 1 year 6 month rate so. 

PTSB still offer the best 1 year term deposit rate out there at the moment.


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## tallpaul (26 Feb 2013)

CiaranT said:


> Thanks for the heads up. Now might be a good time to get the KBC 3.00% 1 year 6 month rate so.



Availed of this myself last week. Very smooth process by filling out the form online and posting in copies of the various documents required. New account was done and dusted within a week. The length of time to set up by post although efficient, as opposed as going to their branch in Dublin, might be a consideration for some to beat the interest rate change.


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## DMcL1971 (27 Feb 2013)

fuzzy10 said:


> Spoke to a bank rep today. KBC are planning to cut term- deposits this week.


 
Thanks for the info Fuzzy. I went in today and opened a new account before the rate drop.


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## Boyd (27 Feb 2013)

Ditto.........very snazzy new premises they have!


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## fuzzy10 (1 Mar 2013)

No problem. Opened an 18 month deposit account this week @ 3%. I think the rep said this rate is dropping to 2.5%. Also, there’s an option of a 25% withdrawal without penalties.

PTSB have a similar product (no withdrawal) but I wouldn’t bank with that shower!


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## Billo (1 Mar 2013)

fuzzy10 said:


> PTSB have a similar product (no withdrawal) but I wouldn’t bank with that shower!



I find that shower very helpful and have no complaints


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## Boyd (1 Mar 2013)

fuzzy10 said:


> PTSB have a similar product (no withdrawal) but I wouldn’t bank with that shower!



You should bank with whoever gives you the best rates and service. Any other prejudice is only cutting off your nose to spite your face.......


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## DMcL1971 (1 Mar 2013)

username123 said:


> You should bank with whoever gives you the best rates and service. Any other prejudice is only cutting off your nose to spite your face.......


 

I try to keep my money with whoever offers the best rate. But when I receive bad service, I complain, if the issue is not resolved, then I move my money elsewhere. I refuse to let a bank that offers poor service have my business. The only caveat to that would be if they offered some fantastic rate which I couldn't refuse. 

I banked with Permanent TSB about ten years ago and thought they were awful, so I moved. A couple of years ago they were offering some good rates, so I thought I would give them another chance. But same again, bad service, mistakes on my accounts and rude staff and managers. So, I left again. Unless they start offering savings accounts paying twice as much as their competitors I won't be going back again.

Of course, I have moved banks so many times and have had savings in so many different banks over the years that eventually i'm going to run out of places to bank. (PTSB aren't the only people to have made it onto my hitlist.)


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## Lightning (1 Mar 2013)

All KBC rates changes complete to the best buy threads. 

KBC no longer offer the highest variable rate on the market. That honour now goes to Leeds.


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## fuzzy10 (1 Mar 2013)

My experience with PTSB has been totally negative, so any prospect of banking with them in the future is gone.

Also, KBC were offering the same interest rate & better terms & conditions


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## Cros1984 (6 Mar 2013)

Just opened an instant access account with KBC with 3.00% interest and noticed now that they are reducing it to 2.40% in May.

Am I still guaranteed the 3.00% come December 31st when interest is paid out or will it be the new rate?

Thanks in advance​


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## DMcL1971 (6 Mar 2013)

I presume the account you opened is the 'Smart Acess Demand Account'. If so, then the account you have chosen is a variable rate account. Interest is calculated daily at whatever the rate is on that day, then the total sum of all that interest is added to your account on December 31st. So you will continue to earn interest at 3% until the first of May, then the rate will drop down to 2.6% from there on out.

For example if you had 1000 Euro in the account you would earn 8.2222c per day at 3%. When the rate drops to 2.6% you will earn 7.1389c per day.


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## Cros1984 (6 Mar 2013)

I see - thanks for the reply. 

How do you work that out (not the best at maths!)? 

I'm about to put 11k into it once my other bank releases the funds and I want to leave it in for a year to a year and a half and will add €700 per month by direct debit and whatever else I can on top of that. Do you think it's the right account for this?


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## DMcL1971 (6 Mar 2013)

The maths is a little bit complicated and made a little bit more complicated by KBC's method of calculating interest on the basis of a 360 day year whereas most banks use a 365 day year.

In short when KBC say their account pays 3% AER they mean they would pay 3% on a 365 day year but because they actually use a 360 day year it means the actual rate used for daily interest calculations is (3.0/365)*360 which is 2.96%.

So, each day, the interest earned is (that days balance) multiplied by (2.96/100/360) which, for your initial balance of 11,000 would be 90.44c each day.

When the interest rate drops from the advertised AER OF 3% TO 2.6% then the actual rate becomes (2.6/365)*360 which is 2.56 and the daily multiplier becomes (2.56/100/360) which, for your initial balance of 11,000 would be 78.22c each day.

Fair play to you if you were able to follow that.

In terms of it being the right account for what you propose. It will certainly do the trick and gives you easy access to your funds at a good rate of return. If you want to get the best return possible and don't think you will need access to your money in the near future, then it might be a good idea to put either the entire lump sum of 11,000 or a large chunk of it into a fixed account for a year or 18 months. Then you could save the 700 a month into a regular saver account each month.

If you check out the best buys thread you will get a good idea. For example you could put your 11,000 into the PTSB Interst First Savings Account, it pays 3.06% fixed and gives you the interest up front instead of having to wait a year. You could then put this upfront interest payment of around 225 from this account into a PTSB Online Regular Saver account and start putting your monthly lodgements of 700 into this account too and get a return of 3.5% variable.

A lot of the decision of what account to open comes down to whether you think you will need acces to your cash or not. Instant access means lower rates. You get higher rates locking the money into a fixed term but you need to be sure you won't need access to your cash in the meantime.

On a final note interest rates are not the be all and end all, consider this.

10,000 saved for one year at 3% will return you 300.
10,000 saved for one year at 2.5% will return you 250.

So all the hassle of moving accounts for an extra 0.5% will make you an extra 50 Euro, on which you then have to pay DIRT at 33%, which leaves you ony 33 Euro. It doesn't seem like much return for all the effort.


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## Cros1984 (7 Mar 2013)

Many thanks for that DMcL1971, I will relook at that now and most likely throw the lump sum into an 18 month savings account.

One last question, I might go with the KBC 18 month and I was wondering will the process be quicker now that they have my ID, proof of address etc on file?


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## DMcL1971 (7 Mar 2013)

Don't forget the rate on the 18 month account dropped to 2.5% last week. So you will actually be better off leaving the money in the smart access account at 3% at the moment and even after May when it drops to 2.6%.

Why not open up one of their Interest Upfront Savings Accounts instead. It will be fixed for a year at 2.7% and you will be paid the interest now rather than having to wait until the end of the period.

To set up any new account with them you can ring them. They will E-Mail you an application form which you need to fill in and post into them. It is the same application form you already filled in, but this time when you submit it you do not need to include your ID info. You can just tick the box indicating you are an existing customer. If you give them a call while you are filling it in they will talk you through it.


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## Cros1984 (7 Mar 2013)

Hey thanks again!

I will weigh up the options pointed out by yourself and go from there.


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