Nationwide Members bond 5% 18 months up to £10K

zombie404

So can some one just clarify for my fuzzy brain.

Is the interest paid at 12 months then at 18 month end of term

Or is ALL interest paid after 18 month maturity date

Altior

Cash bonds I hold with Nationwide (2 & 3 years) have interest added annually (but not accessible). 

Kim_13

zombie404 said:

So can some one just clarify for my fuzzy brain.

Is the interest paid at 12 months then at 18 month end of term

Or is ALL interest paid after 18 month maturity date

12 months and then at the end of term. 

In practical terms it makes no difference (other than some compounding) as it will all be taxable in the same tax year.  

tiger70

I've just opened an account, transferred the 10,000 to my Nationwide current account and then into the fixed rate bond, less than 5 mins .

Hal17

I still cannot understand how my wife has a Nationwide ID and I don't

Anyways just opened this bond for her, but our Lloyds account is saying the Nationwide account does not exist. I guess we will need to check again tomorrow.

We did have a pleasant surprise if that we didn't know the first interest payment on her current bond paid after 12 month, so received £545 this week - very nice.

Pat38493

Stargunner said:

Pat38493 said:

In case anyone is interested and a member of Nationwide, they are offering a 5% 18 month member bond where you can put up to £10K in - has to be funded within 14 days of opening.

Seemed quite attractive to me so I have applied to open one up.  I guess you have to put all the money in at the start.

I can’t understand why you wrote, I guess you have to put all the money in at the start.

when you typed this just above it, has to be funded within 14 days of opening.

I think what I meant was that you can't put money in whenever you want during the 18 months - perhaps you can pay in several times during the next 14 days but you can't put any more in after that.

Question - my wife is on our joint mortgage with Nationwide and we have a joint savings account in Nationwide, but she does not have a current account (although we are just about to open a joint current account for other reasons).  Would she also qualify to open one of these bonds based as I would think this makes her a member?

ColdIron

zombie404 said:

So can some one just clarify for my fuzzy brain.

Is the interest paid at 12 months then at 18 month end of term

Or is ALL interest paid after 18 month maturity date

If you read the Nationwide landing page it says this:

• We'll pay the interest on the anniversary of the date you opened your account (regardless of when the account was funded), at the end of the term, and on the day your account closes.

The Nationwide web site is a great resource for Nationwide products
https://www.nationwide.co.uk/savings/member-exclusive-online-bond/

sammy_zammy

BridgetTheCat said:

The point is it’s still under the £1000 tax free limit. So as long as most other savings remain in the ISA wrapper it might be worth doing depending on what ISA interest rates are available at the time.

Their point is you’ve now taken it out of the ISA wrapper, and to put it back it will contribute to the £20k limit. You might not exceed your PSA now, but you might do in a future tax year.

Growingold

Kim_13 said:

zombie404 said:

So can some one just clarify for my fuzzy brain.

Is the interest paid at 12 months then at 18 month end of term

Or is ALL interest paid after 18 month maturity date

12 months and then at the end of term. 

In practical terms it makes no difference (other than some compounding) as it will all be taxable in the same tax year.  

Reading this on their Member Exclusive Bond page. Just something to be aware of if in future the interest payments straddle 2 different tax years. 
Nationwide has a legal obligation to report interest to HMRC in the tax year that it is paid into your account, which may differ to the tax year in which the interest is deemed to arise and is taxable.

MaterialGirl*

So, as a higher tax payer, if you’d pay in 10k, you would have to pay tax on the interest over £500 next year? Therefore tax on around £250?  

Wouldn’t it be better to just pay in £5000 only?

That would mean with interest on £5000 plus hopefully, another £100 fairer share next year, the total interest stays under £500 threshold?