# Closing INBS Term Deposit Mid Term



## Gervan (19 Jan 2011)

I wrote to INBS two weeks ago asking what would be the penalty for closing the term account early (due to mature mid-March) but have received no reply.
Has anyone closed off an INBS account early?


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## Lightning (19 Jan 2011)

The below message was posted here recently ...



gammarid said:


> I have split up my cash amongst intuitions and I am not particularly nervous about the state guarantee etc. however I am curious to know what my options are with regard to breaking the terms of a fixed term saving account with INBS (should things deteriorate even further)
> 
> The T&C say:
> 
> ...



We can work it out together ...

A) How much are you withdrawing?
B) What is your interest rate? What is the current market INBS interest rate for the same term?
C) How many days are left in your term?


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## Gervan (20 Jan 2011)

I wanted to withdraw the full amount, €21,495

Interest rate 3.5%
INBS still seem to be offering 12 month deposit accounts at 3.5%

The term was 12 months, maturing 13/03/11, (52 days remaining?)

So if B% is 0, the penalty can't be 21495 x 52, can it.


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## Lightning (20 Jan 2011)

I would guess that the formula is
(21,495 x (52 / 365)) / 100 = 30.62 EUR

Maybe drop into an INBS branch and confirm.


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## Gervan (21 Jan 2011)

I managed to get through to the Investment Department today. 
The penalty would be €123.60, or 60 days interest.

This may be of interest to anyone else is deciding whether to close an INBS term account early,


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## Lightning (21 Jan 2011)

Gervan said:


> I managed to get through to the Investment Department today.
> The penalty would be €123.60, or 60 days interest.



Thanks for sharing this but it makes no sense. 

The INBS T&C's state 



> C - is the number of days remaining in the term.



There are 52 days remaining for you, not 60.

and



> B % - is the *difference* between the prevailing market rate of interest for the term
> remaining and the rate on the account.



There is no difference. 

Why not quote the T&C's back to them and refuse to pay the 123.60 EUR ?


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## thedon (21 Jan 2011)

The Following is point number 11 from INBS terms and conditions for fixed rate bonds.

"In exceptional circumstances and at the discretion of the Society a withdrawal may be
permitted prior to maturity of the Account. Requests for such withdrawals or early closure
must be made in writing to Head Office and if approved will be subject to a penalty. This
penalty will be the greater of the following;
1. 60 days loss of interest on the amount withdrawn
or
2. The cost to the Society of replacing the amount withdrawn using the following formula
A x B% x C/365.
A - is the amount withdrawn.
B% - is the difference between the prevailing market rate of interest for the term remaining
and the rate on the account.
C - is the number of days remaining in the term."

Much as it annoys me to say ( I too have a fixed bond that I would like to close early ) it Looks like INBS are correct in this case and the figure quoted is indeed 2 months of interest.


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## camlin90 (21 Jan 2011)

I would speculate that the prevailing *market* rate of interest for INBS is probably quite a bit higher than 3.5%, seeing as the Irish state is paying upwards of 8% to borrow most of the time.

Anyway, relax - you're in good company with plenty of happy INBS depositors.


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## sandra1 (21 Jan 2011)

I am also interested in this 

So in their calculation B=3.5% ?

I have also sent email in November and they told they don't send this information to non-customers (I didn't want to send my account number in email). I just asked for general example - how the formula is calculated. 

And do you get interest at all? Or this penalty is taken from original amount, so you get less then you invetsed?


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## thedon (22 Jan 2011)

Hey folks, I think you may be missing the main point of my original post sorry for not clarifying.

It states in INBS T+C's that the penalty will be either 60 days loss of interest ( in op's case 60 days at 3.5% of €21,495 = €123.60 )

OR

the formula listed below, whichever is the greater of the two. 

A x B% x C/365.
A - is the amount withdrawn.
B% - is the difference between the prevailing market rate of interest for the term remaining
and the rate on the account.
C - is the number of days remaining in the term.

In the op's case 60 days interest of €21,495 is €123.60 whereas the formula INBS use and CiaranT worked out is €30.62 so €123.60 is greater than €30.62 hence they use the bigger figure.
So INBS are within their T+C's to do this sneaky and not nice but hey who said they were nice.


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## Gervan (22 Jan 2011)

It all comes back to reading the small print, I guess. 
I would suppose I would get (21495 x 3.5%) - 123.60. Could be worse.


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## sandra1 (22 Jan 2011)

Hi,

there are 2 types of accounts:  fixed term account and fixed rate bond.
Fixed term account does not have "60 days" chapter just "A, B, C" one.

Are you going to get interest at all? Do you get:
(21495 x 3.5%) - 123.60 
or 21495 - 123.60 ?


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## tech (22 Jan 2011)

I have €99999 in INBS, since sep 2010 I think I want out, how much am I looking at for getitng out early?


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## tech (25 Jan 2011)

called INBStoday and you loose 60 days interest so about €550, Is it worth moving the money or is the cash safe?


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## Lightning (26 Jan 2011)

thedon - thanks for your informative post. 

tech - 99,999 EUR is a lot of money to have in INBS. Have you got deposits elsewhere as well? What is the exact maturity date of your term deposit?


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## tech (26 Jan 2011)

Sep 2011, 

have 53k in Ulster
70k in EBS


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## Lightning (26 Jan 2011)

Ok, you have a large portion of your deposits in Irish banks. Have you considered other options?

Your decision as to what to do with the INBS deposit. 99,999 EUR is a very large sum to have with INBS. Maybe it is worth paying the penalty for peace of mind.


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## tech (27 Jan 2011)

whats would you recommend? 

where to spread the cash?


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## Lightning (27 Jan 2011)

Have you read the best buy threads including the term deposit thread? There are high rates on offer from KBC, Investec and Nationwide UK.


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## Brian_R (30 Jan 2011)

99,999 Euro's in INBS !! Good God. Are you mad? 

Spread your deposits in banks OUTSIDE of the Irish banks.


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