General question about notice accounts

marathon_man_3

I have never had a notice account but have been considering opening one up in the future as I may be able to get a better rate without locking funds away for too long.
I guess that one would give notice of wishing to withdraw by the means of submitting a letter. In such circumstances, would you get a letter back confirming receipt of the notice and the date at which the funds will be released?
I am asking because I recently had a bond (not a notice account) mature with Cheshire Building Society. They wrote to me in advance to say that they would automatically re-invest the money into another bond unless I wrote to say that I wanted the money released instead. As the rate on their follow-up bond was terrible, I wrote off saying that I wanted the money but was concerned, when the maturity date arrived, that they hadn't acknowledged the completed form sent in. I was actually annoyed as I thought that the default position should have been to repay the money and only invest it again if I specifically requested it. It turned out OK, though, but I was worried at the time.
Hence I am wondering about the procedures for withdrawing funds from notice accounts.

alanq

It is a case of reading the Ts&Cs for each account carefully before opening an account.

In the case of the Cheshire I don't think that there was any cause for concern.
"If you do not give us any instructions, then on maturity the balance of your account together with the interest will automatically be reinvested in the nearest equivalent account available from our product range at that time. You will
then have 30 days from the date of the reinvestment to withdraw your funds without notice or loss of interest."
http://www.thecheshire.co.uk/uploadedFiles/Resources/Documents/Fixed-term-terms-and-conditions.pdf

I can see no similar provision for NS&I's Guaranteed Income Bonds. Default is reinvestment for the same term with penalty for withdrawal (AFAIK no provision for opt out period), reinvestment for a different period (at whatever rate happens to apply on that date) or withdrawal. If one sends in instructions early NS&I does not acknowledge and if reinvesting it can take a few weeks for any reinvestment to be acknowledged.

For notice accounts I think that the safest solution is to look for a branch account where at least one should receive evidence that notice has been given. Usually this only lasts for a couple of weeks. So, for instance, having given 3 months notice after 3 months and 2 weeks if no withdrawal is made it is as if notice had been given.

Having said all that there are usually better instant access accounts around which (with bonuses) pay better rates than notice accounts.

Consumerist

I have a notice account with Coventry BS.

Notice is given online and is confirmed by a secure message which you can open when logged in online. The message confirms receipt of notice and notifies you of the earliest and latest dates for the withdrawal.

If you don't withdraw within the dates given then the notice lapses without penalty. In those circumstances you will need to give notice again before you can withdraw without penalty. Only one notice can be active at any one time but can be cancelled.

Withdrawal without notice is available but is subject to loss of interest in lieu of the notice period which should have been given.

slopemaster

I think it's different with each one, so you have to ask them or check T and C.
Last one I had was with M/cr bldg soc. You could give notice initially by phone and they would tell you the earliest and latest dates you could take money out. Then you had to confirm in writing, and they would confirm back.
(And, as Consumerist says, If you don't withdraw within the dates given then the notice lapses without penalty.)

slopemaster

alanq wrote: »

I can see no similar provision for NS&I's Guaranteed Income Bonds. Default is reinvestment for the same term with penalty for withdrawal (AFAIK no provision for opt out period), reinvestment for a different period (at whatever rate happens to apply on that date) or withdrawal. If one sends in instructions early NS&I does not acknowledge and if reinvesting it can take a few weeks for any reinvestment to be acknowledged.

that's not the case with NSi index-linked bonds though - with those, the default is to reinvest, but you can then take out at any time with no penalty

marathon_man_3

Thanks for the responses.
As long as my intended notice is confirmed back to me then I will be fine with that.

alanq

slopemaster wrote: »

that's not the case with NSi index-linked bonds though - with those, the default is to reinvest, but you can then take out at any time with no penalty

No longer true. Withdrawal before maturity now incurs penalties.
http://www.nsandi.com/changes-indexlinkedsavingscertificates