Savings bond query

book12

I am thinking of opening a savings bond, and put £500 for a year.

When the bond matures, the money earned (with interest) will be transferred to an account of my choice. Does the bond stay open so I could invest again, or does it automatically close after maturity? I know it won't convert into an instant savings account though.

Is it worth it investing in a savings bond?

Baldur

book12 wrote: »

I am thinking of opening a savings bond, and put £500 for a year.

When the bond matures, the money earned (with interest) will be transferred to an account of my choice. Does the bond stay open so I could invest again, or does it automatically close after maturity? I know it won't convert into an instant savings account though.

Is it worth it investing in a savings bond?

The word 'bond' tends to be misused in the savings field - most are simply fixed-rate/fixed-term savings accounts.

You would need to check the terms & conditions of the particular account, but most pay the proceeds into an account specified by you on maturity (when it closes).

book12

Baldur wrote: »

The word 'bond' tends to be misused in the savings field - most are simply fixed-rate/fixed-term savings accounts.

You would need to check the terms & conditions of the particular account, but most pay the proceeds into an account specified by you on maturity (when it closes).

Can't check the terms and conditions on the website... Looks like I need to go in branch to ask.

If you have one of those, could you tell me what happens when it matures? Also, why is it 'subject ot availability'?

I thought bonds and fixed rate/term savings accounts are different things. After you explain it to me, it's the same thing. lol.

BruceyBonus

What bank do you want to open the "bond" with?

book12

BruceyBonus wrote: »

What bank do you want to open the "bond" with?

Either Barclays of Halifax.

BruceyBonus

Halifax say "we will write to you 4 weeks before maturity to ask for instructions" for their Guaranteed Reserve account.

Fixed Rate Web Saver is transferred into a Variable Rate Web Saver on maturity.

Don't know about Barclays but it is probably on their website.

Baldur

book12 wrote: »

If you have one of those, could you tell me what happens when it matures?

I did in my previous post - without knowing the specific account, your guess is as good as mine.

You would need to check the terms & conditions of the particular account, but most pay the proceeds into an account specified by you on maturity (when it closes).

Also, why is it 'subject ot availability'?

I don't know to which account you are referring but, quite often, institutions allot a specific quota for their fixed rate accounts - when that figure has been reached, the accounts are withdrawn and are, therefore, no longer available to new savers.

book12

Baldur wrote: »

I did in my previous post - without knowing the specific account, your guess is as good as mine.

I don't know to which account you are referring but, quite often, institutions allot a specific quota for their fixed rate accounts - when that figure has been reached, the accounts are withdrawn and are, therefore, no longer available to new savers.

Ok, I get it now. It sucks that these types of accounts are 'subject to availability'. Everyone should be entitled to these account without of quotas, just like other savings accounts.

BruceyBonus wrote: »

Halifax say "we will write to you 4 weeks before maturity to ask for instructions" for their Guaranteed Reserve account.

Fixed Rate Web Saver is transferred into a Variable Rate Web Saver on maturity.

Don't know about Barclays but it is probably on their website.

Yeah, I know about the Halifax one. However, it doesn't say in detail (or exactly) what happens after maturity of the bond (i.e. will it still open, closed, etc...)...

Anyway, I found about Barclays procedures about when the bond matures: http://www.personal.barclays.co.uk/BRC1/jsp/brccontrol?task=popup1group&value=7753&target=_blank&site=pfs The bond will be replaced by another one (subject to availability). I have no idea why it is subject to availability though.

Baldur

book12 wrote: »

The bond will be replaced by another one (subject to availability). I have no idea why it is subject to availability though.

Simple - they may not be offering another 'bond' at the time that it matures.

opinions4u

Everyone should be entitled to these account without of quotas, just like other savings accounts.

Why?

Should the bank go out of its way to raise more money than it needs, paying interest on money it doesn't need and deliberately making a loss?

Bizarre comment!

agsnu

book12 wrote: »

Ok, I get it now. It sucks that these types of accounts are 'subject to availability'. Everyone should be entitled to these account without of quotas, just like other savings accounts.

What on earth are you talking about? Everybody is entitled to the account until it's withdrawn. Are you saying that institutions should be required to offer the account indefinitely? Because that's pretty nuts.