Nationwide Reward Bond maturing. Nationwide taking the mickey?

miniemma

I invested in the Nationwide Mutual Reward Bond in September 2020 and it is due to mature at the end of March.  The original documents say:

Term

7. There is an 18 month fixed term for this account, beginning on the day you open your account.

8. After the fixed term ends ('maturity') your money will be transferred into an instant access savings account. The terms and conditions and the interest rate applicable to that account, at that time, will apply. We will personally notify you before making this transfer.

But the email I received yesterday says:

Your Fixed Rate e-Bond will automatically mature into a new Fixed Term e-Bond Maturity account. When it does, your savings, along with any interest in the Bond, will earn interest at a rate of between 0.01% to 0.05% AER/gross a year (variable), depending on your account balance.
<snip>
Once the 14-day cooling off period is over, you cannot close your account at all until it matures.

Surely this can't be right?  Has anyone else received this email? Am I interpreting it correctly?  If I am not on the ball then my money is locked in again?  At a teeny tiny interest rate!

Thrugelmir

Why wouldn't you be on the ball? 

miniemma

Thrugelmir said:

Why wouldn't you be on the ball? 

Well I will be but I am concerned that others won't be.  If I am reading it correctly?

[Deleted User]

It's probably an error as fixed term bonds don't usually have a variable rate. 

Rodders53

What was the <snip>ped text?

It may make more sense then.

They often offer "better rate, fixed term alternatives" that you can choose to move to as well as the 'do nothing' maturity account that you can transfer the money to anywhere from.

wmb194

I think you're worrying about nothing as it appears to be an instant access account:

"Your account balance, together with the interest will automatically mature into a new Fixed Term e-Bond Maturity account on your maturity date. This is an instant access account which means you can withdraw your money when you like."

Further down the page it talks about fixed rate bonds and the 14 day cooling off period after which you cannot close the account but this isn't referring to the maturity account.

https://www.nationwide.co.uk/savings/help/fixed-rate-bond-maturity-options/

Albermarle

Your account balance, together with the interest will automatically mature into a new Fixed Term e-Bond Maturity account on your maturity date. This is an instant access account which means you can withdraw your money when you like."

Although calling an easy access account 'Fixed Term ' , is just asking for people to misunderstand /get confused !

miniemma

Rodders53 said:

What was the <snip>ped text?

It may make more sense then.

They often offer "better rate, fixed term alternatives" that you can choose to move to as well as the 'do nothing' maturity account that you can transfer the money to anywhere from.

Full text of the email:

What’s next for your savings once your Fixed Rate e-Bond matures?

Keep saving when your Fixed Rate e-Bond matures As your building society, we want you to get the most from your money – which means making sure you have the right information at the right time. So, as your Fixed Rate e-Bond is maturing soon, we’re getting in touch to help you explore your options. What’s next for your savings? Your Fixed Rate e-Bond will automatically mature into a new Fixed Term e-Bond Maturity account. When it does, your savings, along with any interest in the Bond, will earn interest at a rate of between 0.01% to 0.05% AER/gross a year (variable), depending on your account balance. For full details, please read the Summary Box and Key Product Information. However, you could receive a higher rate by opening a Fixed Rate Online Bond after your e-Bond matures, or by trying one of our other accounts. A bit more about our Fixed Rate Online Bond When your account matures, we’ll no longer be offering e-Bonds – instead, we’ll have Fixed Rate Online Bonds. There are a few differences between the two types of bonds, shown in the table below: e-Bond – which will no longer be available Fixed Rate Online Bond Interest Was paid annually or monthly and interest could be paid into another account. Paid annually, on the account anniversary date and on the maturity date. Interest can only be paid into the bond, not into another account. Paying into your account You could only pay money in when you opened your account. After this point, no more money could be added. You can pay money in when you open the account and up to 14 days after this – but as interest only starts getting calculated from when money is added to the account, it’s worth paying it in at the earliest opportunity. Cooling off period You could cancel your account up to 14 days after you opened it. You have 14 days to add money to your account – or close it if you no longer want it. Early closure After the 14-day cooling off period, there was an Early Access Charge if you closed your account. Once the 14-day cooling off period is over, you cannot close your account at all until it matures. Account number Your existing e-Bond account number would have rolled over to your reinvestment. You’ll get a new account number and sort code when you first save into a Fixed Rate Online Bond. Your savings choices once your account has matured If you don’t want your money to stay in the Fixed Term e-Bond Maturity account, you could: Open up a new Fixed Rate Online Bond: you’re guaranteed a higher rate than if your existing account matures and you leave it in there. If this sounds right for you, just log into the Internet Bank, select your maturity account and choose ‘Reinvestment Options’. Explore our other savings accounts: you’ll find them all at nationwide.co.uk/savings, along with plenty of online tools to help you see what’s best for you. Close your maturity account through the Internet Bank or Banking app. If you wanted to move your savings to another provider, we would support you to make the change (though we’d be sad to see you go). You could also withdraw the money from your e-Bond before it matures. Just bear in mind that if you do this, it will automatically close and you’ll have to pay an Early Access Charge. How long have I got to choose? To see your exact maturity date, just log into the Internet Bank or Banking app, and select your Fixed Rate e-Bond from the ‘Overview of accounts’ screen. During the last 30 days before your account matures, you can also check out the total amount you’ll have in your account when it does mature. Whatever you decide – your membership means a lot Nationwide began when a group of people, our first members, realised they could achieve more by working together than they could alone. And though much has changed over the last 130 years, that partnership is still top of our list. So, whatever you decide, we’d like to say thank you for saving with us. Thank you for choosing us to look after your savings. Your Nationwide Savings Team Need to know AER stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year. Gross a year is the interest rate without tax deducted.

miniemma

Deleted_User said:

It's probably an error as fixed term bonds don't usually have a variable rate. 

I thought the same but it's actually only variable depending on how much you have in the account, not variable throughout the term.

I'm just hoping it's a badly worded email to be honest.

eskbanker

Apart from the stupidity of calling an instant access account a "Fixed Term e-Bond Maturity account" (which is presumably meant to be read as 'an account to be used on maturity of a fixed term e-bond', rather than a fixed term account as such), it seems clear from the wording of the email that the default option is true easy access, but you can put the proceeds into a new fixed term/rate product if you choose to....

miniemma

eskbanker said:

Apart from the stupidity of calling an instant access account a "Fixed Term e-Bond Maturity account" (which is presumably meant to be read as 'an account to be used on maturity of a fixed term e-bond', rather than a fixed term account as such), it seems clear from the wording of the email that the default option is true easy access, but you can put the proceeds into a new fixed term/rate product if you choose to....

Thank you, yes, badly named, I understand now.