The Top Fixed Interest Savings Discussion Area

happybagger

wmb194 said:

Patr100 said:

Steve_xx said:

newuser2011 said:

Hello all, am I right in thinking of all interest is paid at the end of a 2 year fixed term, that interest counts only towards the tax free allowance for that single tax year (and I can’t split and spread over two years as the interest was earned over two years)? Thank you!

The tax is liable in the tax year in which you received payment of interest into the account.

If you can't access it, you don't pay tax on it in that year.

 Interest becomes taxable at the point it’s made available to you to withdraw. For most fixed rate bonds, although interest may be earned and credited to your balance annually, interest is actually paid out at maturity so the interest earned will fall to be taxed in the tax year in which the product matures

https://www.willisowen.co.uk/deposit/tax-on-your-savings

But it depends on whether the bond gave you the option to have the interest paid away during its term. If the option was given to you but you chose to have it accrue in the account then the income still arises in the year in which it was credited to the account.

It would help if people actually mentioned the bonds they're looking at. If it's the new Nationwide (NW) online bonds where, for some reason, NW has now decided that interest cannot be paid out during the term then in theory, yes, all taxed in the final year. However, posters have reported that they asked NW about this and NW says that it will report the interest to HMRC annually. Someone at NW really hasn't thought this through...

*The statement from Willsowen is incorrect - "most" fixed rate bonds will give you the option to have interest paid away every year, in fact in my experience most insist on it.

An interesting and well debated topic. I subscribe to your view@wmb194, as this was my experience with a sum I held in a Skipton bond. My own interpretation was that as soon as the interest "became mine in my account and no longer the bank's" was the tax point. And the following from Castle Trust Bank's terms for their 2 year bond even implies that annual interest credit that can't be (and where there was never an option be) paid out is deemed in the tax year it was credited:

"Accounts with interest paying at maturity will have their interest paid into your Castle Trust Bank savings account on the day of maturity. Interest will be applied, but not available to be withdrawn, on each interim anniversary of the account opening for terms of more than one year and may need to be noted on annual income tax returns where appropriate"

Though they do tend to hedge their bets with "may"

HMRC's own manual appears to have contradictions after 'amending it in 2019.

I think anyone who may think this affects them should seek their own definitive response from HMRC.

FindingBBob

Looks like Ford Money have pulled their 5 Year Saver... Only have the 2 year on the Website. 

SortingIt22

Hi All - first time posting but I've been greatly benefitting from your collective wisdom for the last few weeks. 

I managed to sign up to a number of goodish 2 year fixed rate savings bonds before they were withdrawn. My problem is with Vanquis.  I registered for the bond at 5% on 4 Nov and received an email confirmation.  The sign-up process did not recognise my linked bank account (no idea why, because it had just been accepted by RCI Bank - perhaps it's because it's an account I've had since the 1980s?)  The online system required a recent bank statement.  I managed to get through to customer service on the phone and they confirmed that an online pdf would be acceptable.  Sent this the same day, had an automatic email confirmation, and since then, nothing.  I have tried to phone them multiple times and given up after an hour.  I have sent emails but with no response.  

My question is - has anyone else experienced this?  I don't know whether to cut my losses and fund one of the other two accounts I have set up in the last few days (Close Brothers and Secure Trust Banking, both at 4.85%) or to hang on longer for Vanquis.  I don't want to leave it too long or the window for funding will close.  Any thoughts on the reliability of any of the banks would be great.

t1redmonkey

SortingIt22 said:

Hi All - first time posting but I've been greatly benefitting from your collective wisdom for the last few weeks. 

I managed to sign up to a number of goodish 2 year fixed rate savings bonds before they were withdrawn. My problem is with Vanquis.  I registered for the bond at 5% on 4 Nov and received an email confirmation.  The sign-up process did not recognise my linked bank account (no idea why, because it had just been accepted by RCI Bank - perhaps it's because it's an account I've had since the 1980s?)  The online system required a recent bank statement.  I managed to get through to customer service on the phone and they confirmed that an online pdf would be acceptable.  Sent this the same day, had an automatic email confirmation, and since then, nothing.  I have tried to phone them multiple times and given up after an hour.  I have sent emails but with no response.  

My question is - has anyone else experienced this?  I don't know whether to cut my losses and fund one of the other two accounts I have set up in the last few days (Close Brothers and Secure Trust Banking, both at 4.85%) or to hang on longer for Vanquis.  I don't want to leave it too long or the window for funding will close.  Any thoughts on the reliability of any of the banks would be great.

Have they given you a sort code and account number yet?  It might be they already opened it for you and so the clock on the funding window is already ticking down (or may have expired already).  Maybe the bank statement aspect of it is just for when you want to withdraw in the future, maybe not a pre-requisite for the account to be opened?  Depends what they've said.

SortingIt22

Hi t1redmonkey: no they haven't, just an application number.  They confirm new accounts with a postal letter I believe, so I don't think the clock will start ticking until I have that.  

SortingIt22

I think the bank statement is part of their rather draconian money-laundering checks.  

t1redmonkey

SortingIt22 said:

I think the bank statement is part of their rather draconian money-laundering checks.  

That's unfortunate.  I opened an account with them a couple of weeks ago and it was opened without me having to send off anything further.

It's up to you whether you want to chase them up on it again or just use one of the other accounts you opened. The interest rate difference between the Vanquis account and the other ones you are talking about may not be that significant.  Depends on the amount of money you have to deposit I suppose, the more you have, then the more noticeable the difference is going to be.

andyhicks88

Do Gatehouse allow £1 test payments?

10_66

andyhicks88 said:

Do Gatehouse allow £1 test payments?

Yes, they do.

P933alilli

10_66 said:

andyhicks88 said:

Do Gatehouse allow £1 test payments?

Yes, they do.

Think it depends what youre putting the cash in to! I opened a fixed rate 5 yr at 5.1% and tried at test of £1 but it was rejected. I think it was because the initial minimum balance required was £1000.