Problem with faster payments from Nationwide into Fixed Rate Bonds
Many Finacial intitutions allow multiple deposits within the funding period. The funding period is often either 10 or 14 days from opening the accoutn, though some far-sighted banks like Secure Trust Bank allow 30 days. These allow you to make multiple deposits over multiple days, though you will be losing out on your full interest until you have completed all your deposits, to the benefit of Nationwide. However there are some Banks and Building Societes that allow only a single deposit. In this case, Nationwide's policy change means you are either limited to a £25K deposit , or you have to pay for CHAPS to make a larger transfer.
Perhaps Nationwide had the security interests of its customers in mind, or perhaps their liabilities for “authorised push payments” when making this change, but for those who are careful when making large transactions, Nationwide are effectively removing the ability to use Faster Payments and are pushing those customers to the chargeable CHAPS service, currently £20 per transfer.
Although this mainly affects Fixed Rate Bonds, it can also affect Easy Access Account. In a situation where interest rates change frequently, you may want to move from yesterdays best easy access account to today’s best, in which case you will also be caught if you try and transfer more than £25K eg new payee, no history, therefore 25K limit.
Nationwide say that you can transfer up to £100K per calendar day, but that’s not really true.
Branch Limits - Up to 4 x £25K at a branch, as long as you bring proof of ID , wade through the driving rain, pay for parking, and allocate the time, and still have a local branch etc.
Online Limits - You can only send up to £25,000 online per calendar day if you:
- make a payment to an existing payee who you haven't paid many times before
- make a payment to someone you haven't paid before (eg new fixed rate bond provider)
- set up a standing order using our Internet Bank or Banking app.
They don’t specify what “many times before” means, Customer Services don’t know either, it’s up to the computer, which just says “No”. I tried a transfer to an Easy Access account that had raised its interest rate. The account was in my name, I had set it up 3 months before and I had already made 5 transactions into it, that was still limited to 25K, 5 transactions, apparently, is not many.
Note - if you send a payment to an outside bank, say £10K, and that bank is closed for maintenance and bounces back your transfer immediately, then Nationwide does not recalculate your daily transfer allowance, even if the transaction type is marked “Correction of transfer to”. Your daily transfer allowance is reduced from 25K to 15K until the next calendar day. Obviously, this is a system bug.
I don’t know how many other banks are limiting Faster Payments in this way, perhaps MSE could do the research and provide a list and the limits, as it would encourage me to change my current account provider. It would also be useful if MSE could publish the “funding period” for all its “best” Fixed Rate Bonds and Fixed Rate ISA” so you can plan around these faster payment restrictions, and maybe encourage banks and BSs who have short funding periods and only allow a single deposit to update their rules in light of theses changes to faster payments.
In the meantime, I’m looking for a new bank who will provide me with a modern faster payments system that meets my needs.
PS Apologies if this has been raised before, or in the wrong forum, I tried a quick search but couldn;t find anything
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