Issue with accessing Childrens Bond - Dunfermline BS

CosmicHamster

Hi Folks,

I'm brand new to the forum and this is my first post, I'm hoping to get some info/help re an issue I'm having with some of my daughters savings.

When she was born we took out a savings account, after looking around we saw Dunfermline Building Society Childrens Bond Issue 3. It was a 4 year term and gave 5%. This was to be operated by post and we recieved a savings book.

We opened it January 2010 and planned on added to it at birthdays, Christmas etc. I then went to add funds to it in August 2010 and was told the bond account had been withdrawn and I couldn't add or withdraw funds or close it. I asked why I hadn't been informed of this and was told there was no requirement to and that all details would be in terms & conditions (which I never received and argued this fact).

I've searched online and can't find the full terms and conditions but have found some which state it's closed and term expires in 2014. By the sound of things this account was only open for the month of January, probably as a way for the building society to get in money with the intention of withdrawing the account. I've now emailed Dunfermline to try and recieve the terms & conditions.

I realise there is a no withdrawal policy, which I had no problem with as I would be adding to the account regularly, but now that it's been withdrawn I have to just let the money sit for 4 years?

Basically I'm hoping to find out can I in anyway, wether it be with a charge or not, withdraw the money and close the account as we would like to add it to a different account that thankfully remains open! It's not a huge amount of money, only £700, but I'd rather have it with the rest of her saving as opposed to sitting dormant in the bond.

Thanks,
Chris

noh

I'd rather have it with the rest of her saving as opposed to sitting dormant in the bond

It's not sitting dormant in the bond. It is earning 5% interest.
Do you have somewhere to move it to where it will earn more?

opinions4u

CosmicHamster wrote: »

When she was born we took out a savings account, after looking around we saw Dunfermline Building Society Childrens Bond Issue 3. It was a 4 year term and gave 5%. This was to be operated by post and we recieved a savings book.

We opened it January 2010 and planned on added to it at birthdays, Christmas etc. I then went to add funds to it in August 2010 and was told the bond account had been withdrawn and I couldn't add or withdraw funds or close it. I asked why I hadn't been informed of this and was told there was no requirement to and that all details would be in terms & conditions (which I never received and argued this fact).

You are quite within your rights to ask them to provide a copy of the T&Cs. But this doesn't negate the fact that you have signed up to them - the declaration to open the account did this. So you are bound by the terms.

That said, it would be highly unusual for an account with a medium term fixed rate to allow additional deposits. Basically people will top up if rates fall, exposing the bank or building society to paying interest at a higher rate than the market dictates.

I've searched online and can't find the full terms and conditions but have found some which state it's closed and term expires in 2014. By the sound of things this account was only open for the month of January, probably as a way for the building society to get in money with the intention of withdrawing the account. I've now emailed Dunfermline to try and recieve the terms & conditions.

If you look at every other bank and building society that offers fixed rate fixed term accounts for a longer period of time, you won't find any that allow additional deposits once the issue has been withdrawn. Many won't allow additional deposits after the day the account is opened.

I realise there is a no withdrawal policy, which I had no problem with as I would be adding to the account regularly, but now that it's been withdrawn I have to just let the money sit for 4 years?

It sits there getting an exceptional return (compared to alternatives) for the remainder of the term. Don't knock what you've got - that rate is good.

Basically I'm hoping to find out can I in anyway, wether it be with a charge or not, withdraw the money and close the account as we would like to add it to a different account that thankfully remains open! It's not a huge amount of money, only £700, but I'd rather have it with the rest of her saving as opposed to sitting dormant in the bond.

Keep the money in there. Open a different account for additional funds. There's no law that says it all has to be in one account.

A couple of options: for most flexibility consider Northern Rock - paying 3% on their Little Rock account. For regular amounts consider Halifax Kids Regular Saver. That pays 6% but has significant restrictions on what you can and can't do, and you need to act wisely when the 1 year term is up.

good luck!

dunstonh

We opened it January 2010 and planned on added to it at birthdays, Christmas etc. I then went to add funds to it in August 2010 and was told the bond account had been withdrawn and I couldn't add or withdraw funds or close it. I asked why I hadn't been informed of this and was told there was no requirement to and that all details would be in terms & conditions (which I never received and argued this fact).

Fixed term deposits and structured products do tend to be only on offer for a limited period. A new version tends to get released afterwards at different terms.

Generically, fixed term deposits are not designed to receive ad hoc payments over the term. So, what you wanted to do is not catered for in the product you chose. However, like said above, the money that is in there is fine and its earning 5% p.a. You dont need to change it.

CosmicHamster

Thanks for your help folks, gives me more to look at.

I realise it's a great rate, that was why we took it but I just didn't expect it to close, there was nothing to say further deposits couldn't be made. I'm not that knowledgable about accounts so maybe this is something that happens, were banks open accounts with great offers and then withdraw them.

It is probably more for ease of having her savings in one place that I was hoping to move it, and to add further funds. It's a pain having loads of accounts but like you say it's earning 5%, plan was to add to it so further funds earned this.

Thanks for the info re other good accounts, I'll take a look at them and hope they're a more permanent option.

Regards
Chris

dunstonh

there was nothing to say further deposits couldn't be made.

Some do set and disclose the dates for closure. Others stay open as long as the money allocated to them has not been used up. e.g. they may set £100 million of deposit as the figure. If it gets used up in 3 days it closes then. If it gets used up in 60 days it closes then.

The product brochure will usually state the availability and the ability to whether you can increment or not.