£50,000 limit.

earlgrey_3

Paul_Herring wrote: »

You have a choice, just don't complain if it's the wrong one, since you know the potential pitfalls now.

But I think their point is that they did not know the pitfalls then. The principle has been that savers should not require the same degree of knowledge as stockmarket investors. They aren't asking for cake.

That said, would suggest you don't lose sleep over it. We now know that the government has by previous example effectively guaranteed all bank savings and some might say made the FSCS guarantee redundant. If the position did arise that they couldn't save a bank then that would probably mean the FSCS guarantee was just as worthless and time to take to the bunkers. The political fallout of bailing out savers with an Icelandic bank but not savers with a British bank would be enormous.

Masomnia

earlgrey wrote: »

But I think their point is that they did not know the pitfalls then. The principle has been that savers should not require the same degree of knowledge as stockmarket investors. They aren't asking for cake.

But isn't the point of fixed rate bonds that you gain a higher return for the extra risk of not knowing what's ahead?

If you want more safety you should choose an instant access account with a lower rate.

I don't know why you're complaining. Rates are lower now than they've been for a long time, and set to go lower still and you're still getting a good few percentage points above that!

justaquickie

Masomnia wrote: »

But isn't the point of fixed rate bonds that you gain a higher return for the extra risk of not knowing what's ahead?

I don't believe that's a universal truth. Some bonds provide notice periods or lost interest and some don't. Some allow you to close them early but forfeit all interest. On the whole, they are a 'gamble' on interest rates and an additional return for giving up instant access. There is a widely-held assumption that interest is being put at risk (if variable rates increase) but that your capital is not.

Like everything else - it seems - we have to commit too many hours of our short lives to acres of small-print. A workable compromise would be to kite-mark all bonds that allowed you to close them at any time, but at the expense of losing all accrued interest. Then the scope of the risk is clear.

ad44downey

solomon4222 wrote: »

Hello All,
could anyone advise me on the following situation.
I have fixed term bonds with BRADFORD & BINGLY,
& THE ABBEY, when i invested in these bonds, the
ABBEY and B&B were separate institutions,
they have now amalgamated, becoming 1 institution, which leaves me at risk, because i am now well over the £50,000, F.S.A guarantee, i phoned
B&B this morning, i asked if i could cancel one of my
bonds, they told me i could not cancel until the maturity date which is next September.
ARE THEY CORRECT IN THIS STATMENT, IS THERE
NOTHING I CAN DO.
ANY ADVICE VERY MUCH APPRECIATED.
Ray.

Why worry? the government will bale you out if anything happens even if you had a million quid invested

Paul_Herring

A workable compromise would be to kite-mark all bonds that allowed you to close them at any time, but at the expense of losing all accrued interest. Then the scope of the risk is clear.

:rofl: Clearly a definition of 'workable' I'm unaccustomed with. You'd have everyone griping that that solution was unfair.

MrExample

Quite frankly, given the state B&B was in, you're better off with all your money together...

justaquickie

Paul_Herring wrote: »

:rofl: Clearly a definition of 'workable' I'm unaccustomed with. You'd have everyone griping that that solution was unfair.

Why? It would be a minimum requirement that would have to be observed by the banks & BSs irrespective of the saver's reasons for early closure. Of course, many organisations would additionally offer better break terms (notice periods, lost interest, family-tragedy), but it would ensure you were not putting your capital at risk - unless you chose to invest over £50k, or not remove your funds if a merger put you in that position.

Other products have minimum operating conditions set by regulation. Organisations that chose not to participate would not get the kite mark.

Paul_Herring

Why?

"Why should I have to give up my interest.. they must at least pay inflation/base-rate/some other percentage if I cash it in early. Blah, blah, blah..."

Some people are of the impression that they are entitled to whatever they want, be it interest they believe due, or the ability to break the T&C's of their account without penalty. This is not restricted to FRSBs.

Other products have minimum operating conditions set by regulation.

.. and the minimum operating condition of a FRSB is that you keep the money in there for a minimum amount of time for an increased interest rate. If you want the money out early (or think you might) then you read the T&C's before you get it to see if it's possible, if it's not, then don't get it.

Fairly simple really. In fact, what's the point in getting a FRSB if there's the possibility that you'd want to withdraw it early. There are perfectly serviceable instant access accounts around if that's what might happen.

justaquickie

Paul_Herring wrote: »

".. and the minimum operating condition of a FRSB is that you keep the money in there for a minimum amount of time for an increased interest rate. If you want the money out early (or think you might) then you read the T&C's before you get it to see if it's possible, if it's not, then don't get it.

Fairly simple really. In fact, what's the point in getting a FRSB if there's the possibility that you'd want to withdraw it early. There are perfectly serviceable instant access accounts around if that's what might happen.

You miss the point. The point being to reduce the smallprint Ts and Cs a saver has to read when considering 20+ competitive bond products. A kite-mark (say, "instant-capital-access") indicating a minimum set of operating requirements commonly sought by savers would allow the less flexible fixed bond products to be easily identified and discarded from consideration. If all FRSBs were the same, I would agree with you. But they're not, and I don't.

Maybe we could then read less smallprint and go and do something more interesting instead.

dunstonh

Or perhaps go back to the time when fixed term deposit meant fixed term deposit.