POST OFFICE 7.05% whats the risk?

jack_spratt_2

Richard_Webster wrote: »

Post Office is not organised to deal with this kind of investment - in our case papers have been lost by them in the post and so they say they can't open the account even though they have had the money for 6 weeks. After that inefficiency we wouldn't want them to open an account - but we are still waiting for the money back AND we will ask for the interest we have lost through their inefficiency.

The investment may be fine from protection point of view but all the stress it has caused my wife as attorney for her very old father in looking after his money means that we will go somewhere more reliable even though it may go over the £35K limit.

Apologies for signature - I normally post on the House Buying/Selling Board!

I was told that accounts are taking 4- 6 weeks to process because of the demand by my local post office

majorzott

I also have invested with the Post office and now it's nearly 5 weeks since the cheque cleared. I've phoned several times and each time they reassure me that they have recieved the cheque and it's just that the issue was too popular such that it has overwhelmed their systems, but I have still not received any paperwork to confirm. I also was told 5-6 weeks verbally. They do however say that interest will be applied to the account from the date of clearing the cheque, so hopefully it will all be OK. It doesn't give you a lot of confidence in their procedures though!
Thanks all for information above

Richard_Webster

Richard - has the cheque cleared? If so surely they have already set up the account and all that has been lost is the certificate showing the investment? So surely you can say to them that they need to issue a replacement certificate.

If not then presumably they have the lost the cheque along with your FIL's application and the money will still be in your FIL's account earning whatever interest that pays? You may want to stop the cheque if it has not been presented yet.

My wife went on 21/7/08 to one local post office with power of attorney documents etc and they weren't sure what to do with them the application form was filled in but not all the right details and documents were completed/supplied. They banked the cheque. Fortnight later she gets another letter dated 6/8/08 requesting the documents which are then taken (11/08/08) to another local post office (possibly a mistake on our part) and she hands them in producing the printout receipt she had from the first PO.

5/9/08 she phones up to find out what is happening and is told by call centrre operative that because they never received the documents requested in their letter of 6/8/08 the application was being terminated and the funds were being returned to FIL's orignating account with HSBC. It turned out that the documents were "lost in the post" from the second post office. This isn't acceptable - as far as I am concerned if the Post Office received documents they are received, period.

So we waited for the money to come back.

Two more phone calls on 10/9 and yesterday 15/9 to different call centre people brings the same information. This morning a letter from their centre in Widnes dated 4/9/08 arrived saying that they had terminated the application and "returned the funds to the account from which they originated." The money has still not arrived - why has it taken 12 days for this to happen?.

So nearly 2 months interest on a largish sum of money has been lost - we will wanting it reimbursed and won't trust them now to open the account late.

stevetodd

sombrero wrote: »

Have £300k to invest for one year. Do not need to touch the cash for one year and I want a one year bond. Most of the decent rates for one year bonds have gone now but the Post Office rate holds.

I was thinking of placing the entire amount with Post Office.

Any thoughts on risk factor?

I have just put £70,000 in, not as much as you but I decided to take the risk of putting more than 35k in. I may be completely wrong but say the worst happened and bank of Ireland did go under, would the post office just walk away or perhaps would they not want their name smeared. I was thinking that maybe they would get involved on a voluntary basis if this happened to protect their name as this product has been marketed by them (but obvioulsy pretty desparate thinking).

sabretoothtigger

They are just a reseller, what could they do anyway. Dont confuse po counters with government backed accounts if thats what you mean though you are only talking about a what if

stevetodd

sabretoothtigger wrote: »

They are just a reseller, what could they do anyway. Dont confuse po counters with government backed accounts if thats what you mean though you are only talking about a what if

I know the what if thoughts are pure desparation thinking, the problem was I had to put it somewhere, I had 170k in a B&B account and obviously it had to be moved. I do have some reservations about the PO bond which is why I only put 70k in, I put the other 100k into a 6 month bond withe nationwide when that matures I will safely lock it up with a Birmingham Midshires account, same with the PO Bond if things still look bleak in a year's time

stevetodd

sombrero wrote: »

Have £300k to invest for one year. Do not need to touch the cash for one year and I want a one year bond. Most of the decent rates for one year bonds have gone now but the Post Office rate holds.

I was thinking of placing the entire amount with Post Office.

Any thoughts on risk factor?

I'm really glad you posted this as I have decided to stop my cheque into this product. I know it's extremely unlikey the Bank of Ireland would default but I just don't want to risk it also I think dealing with the post office is going to be problematic (especially when seeing the above posts).

I therefore intend to put the money into BM's 1 year bond of 6.7% (I have mortgages with them so I can't loss the money) unless anyone knows of a better 1 year bond?

DRS1

So nearly 2 months interest on a largish sum of money has been lost - we will wanting it reimbursed and won't trust them now to open the account late.

Sounds like it is time for a written complaint. They have an address in Bristol for this - Post Office Financial Services, Customer Care Team, PO Box 27, One Temple Quay, Bristol BS99 7AX.

I know you don't want to open the account but that may be the best way to make sure you get the 7.05% interest. They have a funny formula in condition 15 for interest on "early withdrawals". I know it is not really a withdrawal because it sounds as if the account was never set up but they are bound to quibble about interest payable for the period they held the money and say it should be lower than 7.05% - perhaps the rate payable on the HSBC account?