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Income bonds with building society, could they do a " Coop Bank "
man5
Posts: 22 Forumite
I have a one year fixed bond with the Coventry building society paying me monthly interest to top up my pension.
In view of the recent " bail in " of the mutual Coop bank who were supposed to look after their members interests, it is reported that pensioners who hold income bonds with them will loose out on the value of their original deposits.
It has made me wonder how safe is my cash is with the Coventry, could they do something along the same lines.
In view of the recent " bail in " of the mutual Coop bank who were supposed to look after their members interests, it is reported that pensioners who hold income bonds with them will loose out on the value of their original deposits.
It has made me wonder how safe is my cash is with the Coventry, could they do something along the same lines.
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Comments
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No, it is completely different. Your confusion is due to banks and building societies mis-using the word "bond". What you have is a savings account. That savings account is guaranteed up to £85,000 even if the whole building society went bust, and nothing less would affect you.
In the case of the co-op it is genuine bond and share holders who are affected.0 -
it is reported that pensioners who hold income bonds with them will loose out on the value of their original deposits.
There have been no reports saying that. You are mixing up bonds with fixed term deposits. partly caused by irresponsible marketing by the banks (by changing the marketing name of their product from fixed term deposit to bond).It has made me wonder how safe is my cash is with the Coventry, could they do something along the same lines.
No. You have a fixed term deposit. Not a bond.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
The bonds with the coop that you've read about are not fixed period investments but permanent ones, akin to shares. It would appear that no one is going to lose the whole of their investment but its value may fall
The Coventry do have such shares as well (as do many other institutions).
Your bond - being for a fixed period - would not be at risk even if the Coventry did something similar0 -
Another reason why banks shouldn't call deposit accounts a bond.0
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Seems like the old rules have been torn up into little pieces and thrown out of the window while we weren't looking, and nowadays they can do pretty much what they damn well like. No use worrying about it.could they do something along the same lines."It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis0
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