Banky team Reviewed editorial answerWith an upfront return the bank pays the return at the start, when you place the money. But for a term longer than a year you need to know how the stated upfront rate is computed: per year, or for the whole term?
Hypothetical example per 100 pounds in a 2-year deposit with a stated upfront rate of 18%: if the figure is the total for the term, you receive 18 pounds on day one and nothing more. If it is per year and both years are paid upfront on a simple basis, you receive 36 pounds. The same stated figure gives two amounts, one double the other, and some banks also compute upfront returns in their own way because the money is paid early.
Also note: if you break the deposit before maturity, the return already paid upfront is usually recomputed at a lower rate and the excess deducted, so you may get back less than you placed.
Before placing money, ask the bank plainly: is this upfront rate per year or for the whole term? Exactly how much will be paid on your amount on day one? And check the key-facts statement for how the break penalty is calculated and its worked example.