Paragon Bank plc - trustworthy?

Bassplayer48

Following the recommendation and link on here I set up a fixed rate ISA account with Paragon as currently one of the top fixed rate ISA's.
Upon trying to transfer money to fund it from my current account, my bank, Lloyds warns that that Paragon should not be trusted and I may be risking my money.
I don't know now whether I should proceed or not.
Are the links on here safe to follow for investors? Or maybe LLoyds are being over cautious and this is just a standard warning?
Grateful of any advice please. Thanks 

Shedman

Paragon is trustworthy.  Have used them several times over the years (and am likely to do so for this years ISAs) with no issues.

The problem stems from them using HSBC as the intermediary clearing bank and you having to put Paragon Bank plc down as the payee rather than yourself (your account gets recognised by Paragon by the reference you put ...usually the application number when you've just opened a new account).  Other banks can't use the usual verification process to confirm the account and hence the warning.  So long as you are certain you have put the bank details, payee and reference number on the transfer exactly as Paragon sets out on your welcome email then it should all be good.  

If you're still a bit concerned then do a £500 transfer (the minimum allowed) and then check its got into the account OK before doing the remainder (although given the Easter weekend you probably won't see it in the account until Tuesday but then you do have 28 days in total to fund so not a big problem)

Albermarle

There can be similar issues with other smaller savings banks as well, as they are not clearing banks and they use a clearing bank for their own bank account.

Bassplayer48

Thanks very much Shedman, appreciate your time giving such a comprehensive reply which explains everything well.
Always a bit worrying moving large sums of money to an unknown company so being very cautious.
As you suggest I will just move £500 in to satisfy myself all is in order.
Thanks again.

GrubbyGirl_2

I transferred £20k from Lloyds this morning.  Yes there was a warning but it wasn't about Paragon being trustworthy it was just making sure I wasn't being conned by someone.  I had notification from Paragon that they had received my money in under 2 hours

refluxer

Paragon are sound. There is some feedback about them in this thread which should help to put your mind at rest...

https://forums.moneysavingexpert.com/discussion/6437402/paragon-bank

Ocelot

I seem to recall similar warnings in the past when I've transferred money to them (and other small banks), from Lloyds.

They are fine.

Bassplayer48

Thanks again for all your helpful comments. My first post on here and I'm impressed with the response.

Albermarle

Are the links on here safe to follow for investors?

Just be aware that the MSE website ( where you found the link I guess) and the MSE forums are only indirectly related.

The forums are public and anybody can contribute, and anything said is not 'official MSE'

Thanks again for all your helpful comments. My first post on here and I'm impressed with the response.

On the other hand, there is a lot of useful personal finance discussion/guidance on these forums, and it is a good place to learn about saving/investing/ISA's/pensions etc . Just do not take every post as gospel truth !

pmduk

GrubbyGirl_2 said:

I transferred £20k from Lloyds this morning.  Yes there was a warning but it wasn't about Paragon being trustworthy it was just making sure I wasn't being conned by someone.  I had notification from Paragon that they had received my money in under 2 hours

I get warnings like that wherever and whenever I transfer money, they already automatically. Just make sure you've done your due diligence.

TMSG

Paragon are perfectly legit and actually not bad for a savings bank in terms of features (better than say Atom Bank). Alas, their rates have tumbled over the last year and we have removed almost everything that isn't fixed, keeping just one easy access because of their "standing order" capability.