Fixed Rate Bonds - closing the account

nolly2009

I was considering saving a lump sum using a fixed rate bond. Of course these all say "Withdrawals are not permitted before the end of the term." I emailed one bank and asked about closing the account without interest in the event of an emergency since you never know what you might need the money for in the next 5 years. They said that the money could not be accessed until the end of the fixed term. Is this really the case?

MovingForwards

It is the case.
Which is why you only lock money away you do not need to get hold of in a hurry.

Best bet is look at high interest savings accounts where there are no withdrawal restrictions.

eskbanker

Two options worth considering:

1. Put the money (if below £20K) into one or more fixed rate ISAs, where under the HMRC rules, providers have to allow access before the end of the term, even though they'll usually apply penalties for doing so.
   
   
2. Split the money and lock some away for 5 years but keep back half of it (or whatever) in more accessible accounts if you think you might need some of it.

18cc

Or you can use notice accounts for example charter Savings Bank have a 95 day notice account which pays 1.9%

EssexExile

18cc wrote: »

Or you can use notice accounts for example charter Savings Bank have a 95 day notice account which pays 1.9%

As long as you are sure you'll have 95 days notice of any emergencies.

etienneg

Just in case it could be relevant to the OP, cash ISAs must by law allow withdrawals during the fixed term. There can be onerous conditions (typically loss of 180 days interest) and of course the interest rates are less than for savings accounts. However, if such a combination of conditions suits you, it may be worth a look. The best buy ISA tables on MSE give details.

Terry_Towelling

Just as an aside, there are occasions where you can withdraw your cash from a (non-ISA) fixed term account.

Some actually permit it (Barclays flexible bonds for example will allow a certain level of withdrawal). Also where the provider alters the T&Cs that apply to the account during its term, they will usually allow you to take the cash and close the account.

This happened to me with my old KRBS accounts.