Age discrimination - is this correct?

Onawingandaprayer

dunstonh wrote: »

Dont mix up non regulated products and regulated products. A 2 year bond isnt a bond. Its a fixed term deposit. Its a non regulated product. It doesnt need their sales rep to sell it. Any staff member can do it.

The OP talked about a fixed rate bond. So did I. I'm not mixing anything up.

Jake'sGran

Onawingandaprayer wrote: »

Last year, I took out a 2yr Fixed Rate Bond with the Natwest (on my Dad's behalf, under PofA) and he's 95! 6.6%...aah. remember those days...:rotfl:

Yes, I have a few of those, all due to mature sometime this year and I have been worrying about where to invest the money. I am over 70 and recently took out a two year bond. People are living longer so this rule seems out of date. The Kent Reliance BS had a good account that was described as "intergenerational"
meaning that it could be taken over by heirs. But, like a few other saving accounts the rate dropped considerably a few months after I joined. I have recently transferred the money to a broker where, with the funds I chose, I expect to do better than banks and building societies.

dunstonh

Onawingandaprayer wrote: »

The OP talked about a fixed rate bond. So did I. I'm not mixing anything up.

I'm not sure what the OP is talking about. It could be a fixed term deposit or a guaranteed equity bond. As many fixed term deposits are incorrectly called bonds nowadays, its hard to really identify the product when "bond" is used.

is it an investment bond, corporate bond, fixed term deposit (bond) or guaranteed equity bond?

You said you took out a 2 year bond but you didn't. You took out a 2 year fixed term deposit incorrectly marketed as a bond.

Fixed term deposits are non-regulated (treated as cash deposits). The other bonds (some of which are also misnamed) are regulated investments. The term "bond" is very misused and marketing departments roll it out on products as it sounds good. They would call them chocolate term deposits if they thought it sold more. It doesn't make them chocolate though.

D1zzy

So what defines a "bond"? - and what are the implications of "investing/depositing" in a bond which is not a bond?

Onawingandaprayer

D1zzy wrote: »

So what defines a "bond"? - and what are the implications of "investing/depositing" in a bond which is not a bond?

The dictionary says "In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest (the coupon) and/or to repay the principal at a later date, termed maturity. A bond is a formal contract to repay borrowed money with interest at fixed intervals."

So in my view, what I purchased from the Natwest Bank on my dad's behalf was exactly that! Someone clearly disagrees and what i actually purchased was a 2year Nat West Fixed Rate Not a Bond by any stretch of the imagination!

margaretclare

chopperharris wrote: »

Yes they are more likely to want to fleece the old dears on dodgy investments instead.

http://www.thisismoney.co.uk/investing/article.html?in_article_id=483016&in_page_id=166

I thought the general advice was to move money from 'more risky' to 'less risky' as you get older. I would have looked with great suspicion at any such 'advice' as the article describes. 'Buyer beware' applies just as much in the areas of banking and investing as in anything else, maybe more so!!

FWIW I am 74 and I don't yet consider myself to be an 'old dear', thank you very much for nothing.

To the OP, your Mum could look at bonds offered by other providers - Barclays is not the only one out there! I know the Yorkshire Building Society has one, for instance, and there are others. http://www.ybs.co.uk/?.com

HTH

gozomark

a fixed term account is not a debt security

D1zzy

gozomark wrote: »

a fixed term account is not a debt security

Clearly I'm a bit dense-

In real terms what does that mean for the "investor". How do I know if I've got a bond or a fixed term acount - and does it matter anyway.

gozomark

It comes down to the difference between investing and saving. In basic terms

investing - your capital is at risk - you are lending the bank money
saver - your capital isn't generally at risk - you are depositing money with the bank

(this is highly simplified - if the bank goes bust, a bond holder becomes a creditor to the company, normally ranking higher than equity holders, but may not get anything back. A saver has first call on the assets.)

The confusion comes from 2 things
1. many people don't understand investments and savings are different, and on these boards use them interchangeably
2. banks called fixed term deposits as bonds when they are not, merely compounding the confusion

if you are saving, you have a fixed term deposit

dunstonh

The dictionary says...

You looked it up in an American dictionary and it shows its not the right thing either. Try looking up fixed term deposit.

How do I know if I've got a bond or a fixed term acount - and does it matter anyway.

A fixed term deposit is a deposit based savings account where the money is held for a fixed term with the terms of interest set at the outset. It is protected under the deposits FSCS protection scheme. It is not a regulated investment product and does not require an FSA authorised individual to set it up at the bank. It wouldnt fall under their regulated sales process.

The other bonds are also mostly misnamed. I suspect the OP was referring to a guaranteed equity bond. These are actually called structured products but are marketed as bonds as well. These are investments and typically pay an amount (monthly, or on maturity) that is set at the outset but has an element of risk involved. Tyically linked to the FTSE100. For example, you can get 7.95% p.a. (paid monthly) for 5 years and your money returned on maturity providing the FTSE100 isnt 30% lower than the investment point. Banks love these types of product and Barclays in particular is a big player here. This product is a regulated investment and can only be sold by an FSA authorised adviser. Not a bank clerk. In Barclays it would be limited by their in-house sales process and the age restriction would apply. It is protected under the investments FSCS protection scheme. Not deposits.

You also have investment bonds. These are also misnamed. They are correctly known as "single premium whole of life assurance plans" for open ended versions or "single premium endowments" for fixed term versions. Sometimes you see the term non-qualifying or qualifying before them as well. Obviously those names arent exactly appealing. Many years ago they started to be called investment bonds. Again, a marketing ploy. These are regulated investments, required an FSA authorised individual and not a bank clerk and would be caught under the banks in-house sales process rules. They would fall under the insurance FSCS protection scheme.

You have other types of bonds (including correctly named ones) but not wanting the post to get too long and also keeping it on subject, I have listed what Barclays would have available. (although they could also have corporate bonds in an ISA, investment bond or pension or unwrapped as well but that would just add to your confusion )