unable to withdraw

drmonk

I've sold a flat STC, but the buyer said he was unable to withdraw money from a savings account:

"Some of our client's deposit is tied up in an account which, unknown to our client he is unable to withdraw until a 12 month period has expired. Our client was under the impression that he would be able to withdraw the money but simply lose the interest. This is not the case and he cannot access the funds until 9th September."

Can a bank actually do this? Not allowing access to your own money even if you pay some early withdrawal fee?

Thanks.

psychic_teabag

Yes, that seems relatively common with fixed-term accounts.

mgarl10024

psychic_teabag wrote: »

Yes, that seems relatively common with fixed-term accounts.

Do you have any examples? The few I've seen are just an interest penalty.

SnowMan

mgarl10024 wrote: »

Do you have any examples? The few I've seen are just an interest penalty.

As we seem to be talking 1 year bonds a good example would be all the 1 year bonds showing in the best savings account article (Cahoot, Investec, First Save) none of which allow withdrawals except in exceptional circumstances such as death.

mgarl10024

SnowMan wrote: »

a good example would be....<snip>

Excellent - thank you.

psychic_teabag

Fixed-term ISAs do seem to allow early access, with a penalty. I've wondered if this is a requirement, but have never got round to checking.

drmonk

I'm trying to be practical here, given that my sale depends on the buyer... I prefer not having to collect any debts once I lost my leverage after completion... I wonder if he could transfer the bonds to me, because I would feel safer if his bank owed me money... I might suggest that to my solicitor...

dunstonh

Can a bank actually do this? Not allowing access to your own money even if you pay some early withdrawal fee?

Yes they can. There are two types of fixed term deposits out there. Those that will allow earlier access with penalty and those that wont. Typically the latter have slightly better rates (generically they should).

Fixed-term ISAs do seem to allow early access, with a penalty. I've wondered if this is a requirement, but have never got round to checking.

It's an ISA thing.

Prudent

mgarl10024 wrote: »

Do you have any examples? The few I've seen are just an interest penalty.

I have a few fixed term accounts. Some have an interest penalty for early withdrawal and some do not allow any early withdrawals e.g.a fixed rate bond with Yorkshire Building society. It is not uncommon. I can't really see how it will be transferable. It is essentially a savings account held in the investors name.

thenudeone

It's not uncommon. Some say they will pay out before maturity only on death or critical illness, for example.

But I remember at least one post on here saying they'd pestered the bank/BS and they'd waived the condition. so worth a try.

Onawingandaprayer

Awful to lose a potential purchaser, but I'd tell them you're putting your property back on the market.

If they're really interested, it should be the purchaser who's scrabbling around looking for solutions to this problem not you.

And if they can't resolve it, ie find the money elsewhere, I'm sure you'll find another one. Fingers crossed.