MSE News: Watch what happens when your bond ends, savers warned

innovate

Consumerist wrote: »

I know, I know, we should all read the volumes of Ts&Cs of all the financial institutions before we finally risk investing but, for heaven's sake, some of us have a life to be getting on with.

Maybe savings accounts do what they say on the tin (legally speaking) but the label on that tin is absolutely humongous.

Actually, a lot of the T&Cs for savings accounts are no more than two pages, and really easy to understand.

It isn't the fault of the bank or building society if customers choose not to read, or to otherwise ignore the T&Cs. On all applications, the customer has to confirm that they read and understood the T&Cs.

If, as you say, the T&Cs are "absolutely humungous", and may be impossible to understand, the customer should be voting with their feet and go elsewhere. Not knowing the T&Cs (for whatever reasons) but entrusting someone with your money is really not very clever.

opinions4u

Consumerist wrote: »

Unfortunately, unless financial institutions are required to meet a "standard" they are prone to exploit customers by burying information in Ts&Cs - often contained in several documents these days.

I know, I know, we should all read the volumes of Ts&Cs of all the financial institutions before we finally risk investing but, for heaven's sake, some of us have a life to be getting on with.

Maybe savings accounts do what they say on the tin (legally speaking) but the label on that tin is absolutely humongous.

But if somebody doesn't open their post it is hardly the fault of the bank.

I listed a number of potential maturity options above. If you were going to develop a "standard" which one is the right one? Some customers are quite happy to roll over their money in to a new term deposit. Others prefer it to sit in an easy access account while they think about it. Others want a cheque in their hand.

None of these are exploitation. None of these are wrong, unfair or unreasonable as long as the communication is clear. One is not better than the others for everybody.

What should the "standard" be?

A letter 2-6 weeks prior to maturity telling you what's happening and what your options are seems fair. Allowing different providers to offer different options is all part of a competitive market.

There is little evidence of banks being unfair with maturity options. Indeed, the evidence seems to suggest customers who feel hard done to only have themselves to blame. Nothing to do with sharp practice.

Nestor100

Just had a problem with a Halifax fixed rate bond that matured on 14th October 2012. Decided to roll over to a new bond paying a respectable 3.65%. Halifax dropped the rate to 3.15% on 16th October. Thought we had just squeezed under the bar with the old rate, but no.

This is how the Halifax deals with roll overs. If your bond matures on a non-working day- the 14th was a Sunday, they move the maturity date over to the next working day. Thus the bond matured on Monday 15th. Still time to get in at the old rate? No, because the Halifax doesn't release the money until the next day, the 16th, and guess what? The interest rate had been reduced!

This I am told is all in the small print, and it probably is, but it seems very cynical.

The Halifax has since reduced rates again on these bonds, and again they chose a Tuesday to do it, thus catching out investors with bonds maturing at the weekend!

Froglet

When you are already an exisiting customer with an institution and have held a fixed bond with them for what ever length of time which is coming to an end and they quote the new rate,i cannot see why they cannot honour that rate providing you tell them beforehand that is what you wish to do.Sneaking in a drop just before it rolls over is harsh and offers no loyalty.It will already be much lower than the one that is just finishing so it is like adding insult to injury dropping it again just beforehand.