Fixed Rate e-Bonds - Nationwide - Advice pls?

linclass

Hello,

2 weeks ago I opened a 1 year fixed rate/term e-bond with my Building Society, Nationwide. I opted for monthly interest paid rather than annually, as I'm a non- working non-taxpaying person. I was lucky, as within just 2 days of me opening this, the product was changed slightly and the interest rate lowered!

I now have £30k that I want to invest also. I'm VERY tempted to put it into another Nationwide e-Bond, only this time for 6 months fixed rate/term, as the interest is better that either the 9-month or 1 year fixed.

I KNOW 'we shouldn't put all our eggs in one basket', that's obvious, and I'm very aware that Nationwide could go under, although I'm reading all the time this is highly unlikely.

My query is this: My Husband IS a tax payer although retired, we have a joint Flex account, and if I read this correctly up to £50k would be safe IN ADDITION to the lump I put in the first e-bond (above). How would it be taxed though? They would tax it monthly on HIS half wouldn't they? Oh dear, I don't think I've explained this too well! Try to understand, :rotfl:

Ange

itsnever2lateisit?

If you opened your e-bond via your joint Flexaccount then the e-bond will be in joint names also.

As a joint account your cover under FSCS is 2x£50,000 = £100,000

EDIT: Although reading your post again it is not clear if the 1st bond was from a Flexaccount in your name only. If this was the case then you need to fill out a form R85 from HMRC to ensure you get your interest tax free. I am not sure of the tax treatment for a joint account where one is a tax payer and the other a non- taxpayer.

It might be worth your while undertaking some tax planning here to ensure that all YOUR tax allowance is fully utilised, but only the two of you can determine what is best, taking into consideration matters like relationship stability ;-)

evenasus

I don't understand your tax question I'm afraid, but...
Your savings will be guaranteed £50 thousand each. You can't share £100 thousand 70/30 if you see what I mean.

This from someone, who until last year had over £250 thousand in Nationwide. :rolleyes:

linclass

itsnever2lateisit? wrote: »

If you opened your e-bond via your joint Flexaccount then the e-bond will be in joint names also.

As a joint account your cover under FSCS is 2x£50,000 = £100,000

EDIT: Although reading your post again it is not clear if the 1st bond was from a Flexaccount in your name only. If this was the case then you need to fill out a form R85 from HMRC to ensure you get your interest tax free. I am not sure of the tax treatment for a joint account where one is a tax payer and the other a non- taxpayer.

It might be worth your while undertaking some tax planning here to ensure that all YOUR tax allowance is fully utilised, but only the two of you can determine what is best, taking into consideration matters like relationship stability ;-)

Hi itsnever2lateisit?, thanks for this. The first e-bond was opened from MY flex account - in my name only. I do get the interest tax-free on this one.

If I took out ANOTHER e-bond from MY flex account I would still not be paying tax as I'm still under the threshold.

The reason I asked re. the joint account though, is I'm not sure just how safe Nationwide is. I just wanted the additional safety of using another flex account and not opening BOTH e-bonds from my account which will take the 2 bonds well over the £50k threshold.

Ange

linclass

evenasus wrote: »

I don't understand your tax question I'm afraid, but...
Your savings will be guaranteed £50 thousand each. You can't share £100 thousand 70/30 if you see what I mean.

This from someone, who until last year had over £250 thousand in Nationwide. :rolleyes:

Hi evanasus, thanks for your reply. Just knew i was waffling....:j sorry.

What concerns me more is whether Nationwide are likely to 'go under'. The Govt have bailed out Northern Rock et al, but would they have the money to bail out Nationwide if necessary??

Your comment... '' This from someone, who until last year had over £250 thousand in Nationwide. :rolleyes: '' worried me somewhat..:eek::eek: