Can I withdraw Fixed term deposit early?

Xinpei

Hi there,
I have a fixed term deposit with Lloyds tsb for 6 months. I went into the branch two saturdays ago and a man at the customer service counter informed me that I can withdraw it early but will not receive all my interest (he said I will get some!) so we made an appointment to withdraw my deposit out.

When I arrived to do that following week, the lady said I could not take my deposit out and will have to speak to the branch manager who will call me yesterday. Have not heard from the branch manager or anyone.

Is this like a case by case basis or so cut and dry there is absolutely no way I can take it out? It is stated in the T&C that I can't but we're rather desperate....

isofa

If the T+Cs when you open say you either can't withdraw early, or you can only withdraw with penalty, usually 120ish days, then you are bound by those, that is the whole point of a fixed term. You agree to lock your money away, and in doing so the bank offers you a better rate than instant access.

If you are really desperate, then it's your only option (if indeed the T+Cs allow early access with loss of interest), you are fortunate, as many fixed term accounts do not allow emergency early access at all. If not then there probably isn't much you can do, unless you have a very long chat with the manager.

rb10

As isofar said, it depends on the T&Cs, they are all different. For example, a fixed Halifax ISA will take 180 days penalty (but not exceeding the interest accrued) whilst closing a normal Halifax fixed rate account early forfeits something like 6 days per month or part month remaining, and others do not let you close it at all.

According to http://www.lloydstsb.com/legal/savings_legal/term_deposit.asp, this one (assuming your T&Cs are the same as the ones here - check them) is one of the latter type, making it clear that they do not allow closure under any circumstances.

Hungerdunger

I know this doesn't help you Xinpei, but I guess this is a salutory lesson for a lot of people who are attracted by the rates offered on fixed-rate accounts. Don't lock money away if there is a reasonable chance that it could be needed befoe the account "matures".

Just out of interest, is the amount you need sufficiently small for you to obtain it on a credit card? If so, (and depending on how long your money is still tied up), this might be a cheap alternative.

Xinpei

Thanks for all your replies. I just got word from the branch (after a very helpful lady on the phone managed to get through for me!) that the local director (?) will have to sign a form to release my money but it should be no problem. Fingers crossed.

I don't know if £6000 is a small amount and I don't know if Lloyds is going to charge a penalty fee for this. We did think about the credit card but it feels better to spend our own money than on the CC.... The term actually ends in May so not that far away from now but we do need it soon.

Agree with Hungerdunger that people should think carefully before locking money away... *sheepish grin*

Paul_Herring

Xinpei wrote: »

Agree with Hungerdunger that people should think carefully before locking money away... *sheepish grin*

There is a half-way house with this if you split the lump sum up and stagger the bonds (ok - you don't get all the money 'soon' but you don't necessarily lock it all away for a whole year or whatever): http://docs.google.com/View?docID=dwnwdnb_66drzgz6f4&revision=_latest&hgd=1

alanq

There was a similar question about a Close Brothers bond in another thread. The bond conditions stated that there would be no access before maturity but within the Ts&Cs it states that the Bank MAY, if it chooses to do so, repay earlier on request on deduction of a penalty reflecting its costs in having find the money elsewhere.

eeja

As mentioned previously on this forum the terms and conditions are governed by the Unfair Contract Terms Act and if a bank is unfairly profiting from such penalties then they cannot to charged (enforced) . The current well publicised bank penalties case is an example and the charges where unfair were ruled invalid. The case is now being appealed by the banks.
So if you feel the penalty is unfair and or unreasonable and cannot reach agreement with the Manager ,you can bring the matter before a judge . The judge has discretion after hearing the evidence to decide what is fair and reasonable.
An outright ban on withdrawals is of course a different matter.
In many other countries the amount of penalty a bank can charge is based on the cost to the bank of replacing the funds withdrawn so in case of falling interest rates only an admin charge might be payable.

Paul_Herring

eeja, it would be a penalty if the sum returned to you was less than the amount deposited.

Withholding interest, or preventing access altogether (provided it's mentioned in the T&C's) which are the two normal clauses, are not penalties.

Hungerdunger

Paul_Herring wrote: »

eeja, it would be a penalty if the sum returned to you was less than the amount deposited.

Withholding interest, or preventing access altogether (provided it's mentioned in the T&C's) which are the two normal clauses, are not penalties.

Paul - it's no good telling him - he's been going on about this for months even though no one ever agrees with him!

simon_templar_2

Like a broken record aint he lol