Access Bond Explanation Please

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justinlfc

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So Ive been reading old posts about this and I called bank and I am getting 2 different stories here.

So at Month 0:
Bond amount: R100 000
Amount Debited: R1 000
Interest : R800

Month 1:
Bond amount: R99 800
Amount Debited: R1 000
Interest : R799.99

Now say I put in R10 000 cash into the access bond minutes after Month 1 is deducted. At the next debit would things look like this?
Month 2:
Bond amount: R89 980
Amount Debited: R1000
Interest : +-R740
 
Last edited:
justinlfc said:
So Ive been reading old posts about this and I called bank and I am getting 2 different stories here.

So at Month 0:
Bond amount: R100 000
Amount Debited: R1 000
Interest : R800

Month 1:
Bond amount: R999 800
Amount Debited: R1 000
Interest : R799.99

Now say I put in R10 000 cash into the access bond minutes after Month 1 is deducted. At the next debit would things look like this?
Month 2:
Bond amount: R899 800
Amount Debited: R1000
Interest : +-R740
Click to expand...

The bond amount in Month two would be R989 800 and not R899 800.

Haven't checked your interest calc, but the principle of reducing the interest with extra deposits is correct.
Instalment stays the same (as you've reflected), just the allocation between interest and principle.
 
eehellfire said:
The bond amount in Month two would be R989 800 and not R899 800.

Haven't checked your interest calc, but the principle of reducing the interest with extra deposits is correct.
Instalment stays the same (as you've reflected), just the allocation between interest and principle.
Click to expand...

thanks, I fixed the miss calculation
 
The principle is correct and if you contact your bank you can ask them to adjust your installment as well (Done automatically if you take additional money out of your access bond).
 
Nice thread!

Got a question - are you allowed to withdraw all money in the access bond? Or just whatever is surplus? So say from month 0 you pay R5000 instead of R1000. Then after month 1 can I withdraw all R10 000 or just R8000 ( (R5000x2) - (R1000x2) )?
 
peeryus said:
Got a question - are you allowed to withdraw all money in the access bond? Or just whatever is surplus? So say from month 0 you pay R5000 instead of R1000. Then after month 1 can I withdraw all R10 000 or just R8000 ( (R5000x2) - (R1000x2) )?
Click to expand...

Depends, some banks let you draw back up to the original amount others only let you draw the excess amount that you've paid in.

In your above example, you will never be able to draw all 10k because you would have interest costs in both months. But depending on the bank, you would be able to drawn either 8k or a bit more (like 8.4k depending on interest)
 
peeryus said:
Nice thread!

Got a question - are you allowed to withdraw all money in the access bond? Or just whatever is surplus? So say from month 0 you pay R5000 instead of R1000. Then after month 1 can I withdraw all R10 000 or just R8000 ( (R5000x2) - (R1000x2) )?
Click to expand...

I have an Access Bond with Standard, from what I can see I can withdraw back up to the original bond amount. Just be aware that withdrawing more than your surplus will result in an increased instalment.

In your example, you'd be able to withdraw R8000 + whatever portion of the R2000 hasn't been charged to interest (or other charges such as service fees etc).
 
Thanks for the replies guys. So it seems that basically the bank would like the interest to be paid up and you'll have access to the rest.
 
On the topic you would do well to set your debit order statically even if just a few hundred rand more than the required instalment.

Not only will it drastically reduce the lone term and over all interest if you leave it alone, but should the crap hit the fan you'll have an emergency fund in no time.

If you make your repayment 150% if the required debit you'll easily pay your loan off in <10 years.
 
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