Beware Paragon T&Cs

peteques

Hi all. I have some money in a Paragon fixed term account. I thought it was 1yr but when I looked it was 2yrs. The interest rate isnt great so I thought - I'll take the penalty and move it out - yet it appears I cannot. On phoning the bank they say the T&Cs say the money cannot be moved and the account cannot be closed. I asked what if I needed the funds in an emergency. The bank said this could be done but it would have to be under extenuating circumstances - they did not say what these could be and I would have to prove it. So apparently I now cannot move for another year (at poor interest). Does anyone know if this is true as I cannot find my T&Cs - it was a 2yr fixed rate bond. If it is true I'll have to wait but a lesson learned to always read the T&Cs. 

grumbler

peteques said:

 I cannot find my T&Cs - it was a 2yr fixed rate bond.

Even for their current fixed rate accounts I see "You cannot make withdrawals during the fixed term".

Bonds are typically even more strict in this respect.

https://www.moneyhelper.org.uk/en/savings/types-of-savings/cash-savings-bonds

wmb194

peteques said:

Hi all. I have some money in a Paragon fixed term account. I thought it was 1yr but when I looked it was 2yrs. The interest rate isnt great so I thought - I'll take the penalty and move it out - yet it appears I cannot. On phoning the bank they say the T&Cs say the money cannot be moved and the account cannot be closed. I asked what if I needed the funds in an emergency. The bank said this could be done but it would have to be under extenuating circumstances - they did not say what these could be and I would have to prove it. So apparently I now cannot move for another year (at poor interest). Does anyone know if this is true as I cannot find my T&Cs - it was a 2yr fixed rate bond. If it is true I'll have to wait but a lesson learned to always read the T&Cs. 

Yes, this is normal with Paragon and many, many other savings bonds. If you look at its current range they're all the same and it's clearly stated in the account summary. Always read the terms!

eskbanker

peteques said:

The bank said this could be done but it would have to be under extenuating circumstances - they did not say what these could be and I would have to prove it.

This would typically be something like terminal illness, rather than simply a desire to earn better interest.

alternate

This is the vast majority of Fixed Term Deposits.  I can't remember the last time I saw one with an escape clause.  It is why they pay more than easy access and one reason rates are slightly higher than equivalent ISA deposits (that legally have to have a form of escape clause).

The general exemption is death of the account holder.

ZeroSum

Its not a Paragon thing to beware of, it's across the board on all banks. It's only really ISA's you can withdraw early & take a hit on interest.