Treatment of savings bond on death of holder

Bobziz

Hi, 

Does anyone know how Nationwide deal with fixed rate online savings bonds on the death of the sole holder ? Their t&C's state that the account will remain open until they receive the paperwork to enable closure. There will be no penalty or loss of interest. However, the bond certificate will automatically be cancelled on notification of the death. 

Does this last statement mean that the bond will no longer continue to earn interest? If this is the case then there will potentially be a long period between notification of death to grant of probate and closure of account where no interest is being earnt.

Thank you.

Keep_pedalling

Unless the deceased had more that £50,000 held with NW they will release the money to the administrator with needing probate.

Bobziz

Thanks @Keep_pedalling, the money held is over £50k.

SnowMan

Don't have experience of Nationwide, and many things are possible, but I very much doubt that no interest is earned between date of notification of death and when the documents to close the account are received (e.g. grant of probate where required).

Where they say for a sole account 'If the bond is only in the name of the person who died, it will remain open until we receive the documents to close it' I read it to mean it will remain earning interest at the relevant fixed rate to the earlier of the date the grant of probate is received or the end of the fixed term. If it's an ISA it remains as an ISA (continuing ISA in the jargon) during that period (subject to the 3 year limit).

Where they say 'We automatically cancel the bond certificates' I think they are talking about the ownership of the bonds and are referring to the change of ownership of the bonds from the deceased to the estate. 

Keep_pedalling

Bobziz said:

Thanks @Keep_pedalling, the money held is over £50k.

If looks like The bond stays open until you present the certificate of probate to close the account

Extract from the link.

Bonds

Joint accounts

If the person who has passed away held a joint account, we'll change the account to the other account holder’s name only when we receive the death certificate. It then becomes solely theirs.

Sole accounts

If the bond is only in the name of the person who died, it will remain open until we receive the documents to close it. There are no fees to pay, even if the account is closed early. We automatically cancel the bond certificates.

https://www.nationwide.co.uk/help/challenging-times/bereavement/what-happens-to-accounts/

Bobziz

Thanks both. Cancelling the bond certificate as a result of a change of owner would make sense. My fear was that in doing so the bond would no longer exist and the money would in effect be held in a holding account earning no interest.