Nationwide Bond interest

metrobus

I opened a Nationwide 3 y fixed rate bond on November 2nd and nominated the interest to be paid into my linked Nationwide flex current account monthly.
However now on December 5th and nothing is there is this normal?
Thank you.

kaMelo

metrobus said:

I opened a Nationwide 3 y fixed rate bond on November 2nd and nominated the interest to be paid into my linked Nationwide flex current account monthly.
However now on December 5th and nothing is there is this normal?
Thank you.

Are you sure that's what you got?
Nationwide normally have no option for paying away the interest.

metrobus

Yes,  pretty certain.
I don’t actually mind the interest compounding since it’s 4.75% and I have no real need for it.
I will double check the instructions when I get on my laptop.

kaMelo

Yes, their fixed rate bonds are compounded annually, with no option for monthly interest or to pay it away.

https://www.nationwide.co.uk/-/assets/nationwidecouk/documents/savings/terms-and-conditions/p3983-fixed-rate-online-bond.pdf?rev=86373bd39b0f414da5e9a1ae1319f45e

Bigwheels1111

I think you will see it in your account on the 2nd or 3rd of November 2023.

metrobus

OK I must be mistaken and got it wrong,but certain i ticked that option and also days after opening it did say interest would beadded monthly to nominated account.

metrobus

Yes it was opened online.

Would the total interest earned over the three years count towards the final years tax allowance, since its only then it can be accessed or would each years interest count for the respective year?

wmb194

metrobus said:

Yes it was opened online.

Would the total interest earned over the three years count towards the final years tax allowance, since its only then it can be accessed or would each years interest count for the respective year?

Given that no option is given to pay the interest away during the term, in theory, yes. However posters in other threads say they've asked Nationwide about this and Nationwide's response has been to say that it will report the interest to HMRC annually. 

Nationwide's potentially created a mess. It's annoying that it's decided not to allow the paying away of interest.

Albermarle

Given that no option is given to pay the interest away during the term, in theory, yes. However posters in other threads say they've asked Nationwide about this and Nationwide's response has been to say that it will report the interest to HMRC annually.

It is probably worth noting, that some providers seem to report the interest to HMRC like this, and some report at the end of the fixed term.

From other threads it is less than clear (to me anyway) why they do not all seem to follow the same procedure.

wmb194

Albermarle said:

Given that no option is given to pay the interest away during the term, in theory, yes. However posters in other threads say they've asked Nationwide about this and Nationwide's response has been to say that it will report the interest to HMRC annually.

It is probably worth noting, that some providers seem to report the interest to HMRC like this, and some report at the end of the fixed term.

From other threads it is less than clear (to me anyway) why they do not all seem to follow the same procedure.

Yep, it's a mess. I also have one of these Nationwide bonds and I haven't decided what to do but if Nationwide is going to report annually I probably will in my Self Assessment as well. I'd rather not have a confused HMRC and the truth is that it probably wouldn't notice that the reporting from Nationwide doesn't strictly follow its rules anyway.

[Deleted User]

Surely, it's better to have your interest paid and declared annually than have it all declared for tax in one year, particularly if you are a border line tax payer.   Having interest paid annually may keep you within the annual savings allowances, but declaring it all in one lump sum, may push you above the savings thresholds for that year.