Loss of interest on fixed rate saver

hugbourne222

I transferred cash into a 2 year deal with Nat west on 22 10 24 and on 29th Oct 26 they messaged to say they had transferred it into a new 2 year deal without any advance notification although I knew it was soon to mature. I wanted to put the savings into an ISA so transferred the money out - I suffered the loss of 3 months interest as they said maturity was 7th November - 9 weeks after complaining I am just getting the stock reply “we are reviewing it and feel free to complain to the financial ombudsman” - 

Woodstok2000

Are your dates right?

Isthisforreal99

As above your dates can't be right, 2026?

If you opened a 2 year fixed saver in Oct 2024 why would it have already matured?

friolento

hugbourne222 said:

I transferred cash into a 2 year deal with Nat west on 22 10 24 and on 29th Oct 26 they messaged to say they had transferred it into a new 2 year deal without any advance notification  

Leaving aside  confusion about dates: the maturity processing was almsot certainly detailed in the T&Cs you accepted when you took out the account. However, we do usually get a reminder email about impending account maturity - have you checked your spam folder?

hugbourne222 said:

......they had transferred it into a new 2 year deal without any advance notification although I knew it was soon to mature. I wanted to put the savings into an ISA so transferred the money out - I suffered the loss of 3 months interest as they said maturity was 7th November.....

It is unusual that you can withdraw from a non-ISA fixed term account but the T&Cs of your account may have specified that you can do so with a loss of 3 months interest. If that is the case, you will have difficulties arguing your case.

If you can clarify the dates, and post the exact names of the accounts involved, people can comment in more detail about your case.

mills112

I think the OP needs to clarify the dates as none of them make any sense at all.

I had a fixed rate 12 month bond with Natwest and a month before it matured, I received an email (and also letter I think) to say that I had chosen to re-invest so there is no need for me to do anything.

I called them to say that I have made no such decision and the advisor said that is their default option when a bond matures unless they hear from you otherwise!  I told him I wanted my bond closed when it matures, so when it matured, it became an instant access account.

Sounds like the OP did not act on the correspondence that told him he had re-invested as that normally comes a month before maturity, and you had to call them to ask that they don't do that.

hugbourne222

With apologies - yes dates are wrong - transferred in 22nd Oct 23 and info said two weeks before maturity I would receive an options pack. Message from nat west was on 29th October 25. I never received an options pack - just this message saying they had moved all my money (£25k) to a new 2 year fixed rate saver. I didn’t want to do this as I needed some of the cash now. I assumed I had missed the options pack and as they had transferred the money surely it had matured and I could close the account - so I did and when the transfer to my current account came through on the next day I had lost over £300 as an interest penalty! 

eskbanker

hugbourne222 said:

they said maturity was 7th November

hugbourne222 said:

With apologies - yes dates are wrong - transferred in 22nd Oct 23 and info said two weeks before maturity I would receive an options pack. Message from nat west was on 29th October 25. I never received an options pack - just this message saying they had moved all my money (£25k) to a new 2 year fixed rate saver. I didn’t want to do this as I needed some of the cash now. I assumed I had missed the options pack and as they had transferred the money surely it had matured and I could close the account - so I did and when the transfer to my current account came through on the next day I had lost over £300 as an interest penalty! 

Maturity isn't always an exact number of years after funding an account, so did your original 2023 documentation specify maturity on 22 October, 29 October, 7 November, or something else?

hugbourne222 said:

I wanted to put the savings into an ISA so transferred the money out

What's the product name of the account name opened in late 2025, as it's unusual to be able to access a fixed term account prematurely unless it's an ISA?

masonic

It is common for the high street banks to offer fixed term accounts with access at a penalty, so while it is unusual for accounts paying the best rates, that does check out. Here is the current offering:

https://www.natwest.com/savings/fixed-term-savings-account.html

I note it allows early closure if instructions are given in writing, but not withdrawals, but of course 2 years ago the account terms could have been more relaxed. There are at least 2 weeks where you can access before the money is locked in for the term, meaning the maturity date is at least 2 years and 2 weeks after the opening date.

So essentially you are saying that the 29th October email confused you and the bank's position is that you made a withdrawal prematurely having not understood that this was advance notice of maturity.

This would be customer error, and I'm not sure on what grounds you are complaining. Was the text of the email misleading or factually incorrect? Do you believe you should have been presented with a warning when you transferred the money? Did online banking already show the account had matured and you believe a 14 day cooling off period was not observed?

Could you paste the text of the email here?

mills112

hugbourne222 said:

With apologies - yes dates are wrong - transferred in 22nd Oct 23 and info said two weeks before maturity I would receive an options pack. Message from nat west was on 29th October 25. I never received an options pack - just this message saying they had moved all my money (£25k) to a new 2 year fixed rate saver. I didn’t want to do this as I needed some of the cash now. I assumed I had missed the options pack and as they had transferred the money surely it had matured and I could close the account - so I did and when the transfer to my current account came through on the next day I had lost over £300 as an interest penalty! 

it sounds like you may have missed correspondence from them to notify you that the account is maturing or they don't send this out.  it could be that their t&c states that the bond will be re-invested for a similar term on maturity unless you tell them otherwise two weeks before the bond matures.

i found it very strange that they re-invest your bond automatically if they don't hear from you as the default option tend to be that it becomes an instant access, but as I had said, when I called the bank, I was told the default option for their bonds is to re-invest in the same term again. 

I still have the email that they had sent me a month before my bond matured to tell me that I had decided to re-invest, and I remember calling them to tell them I didn't do this and they told me it was the default option on maturity but that I would get an options letter in the post.  I vaguely remember getting the letter in the post, but I am not certain about the letter.

Alexland

mills112 said:

i found it very strange that they re-invest your bond automatically if they don't hear from you as the default option tend to be that it becomes an instant access, but as I had said, when I called the bank, I was told the default option for their bonds is to re-invest in the same term again. 

While I have never experienced this myself I also find it very strange hearing that some providers by default put customers into a situation where they may have to pay penalties (or even be restricted from access) on a new fixed term.

While it might be allowed in their small print I wonder how they justify it is treating the customer fairly.

If someone took out a 2 year fix it's not safe to assume they wanted a 4 year fix else maybe they might have taken out a longer fix in the first place. The default option should be an instant access account.

In that situation I would complain and escalate to the ombudsman if required as it seems very wrong.

mills112

Alexland said:

mills112 said:

i found it very strange that they re-invest your bond automatically if they don't hear from you as the default option tend to be that it becomes an instant access, but as I had said, when I called the bank, I was told the default option for their bonds is to re-invest in the same term again. 

While I have never experienced this myself I also find it very strange hearing that some providers by default put customers into a situation where they may have to pay penalties (or even be restricted from access) on a new fixed term.

While it might be allowed in their small print I wonder how they justify it is treating the customer fairly.

If someone took out a 2 year fix it's not safe to assume they wanted a 4 year fix else maybe they might have taken out a longer fix in the first place. The default option should be an instant access account.

In that situation I would complain and escalate to the ombudsman if required as it seems very wrong.

i was a bit shocked when I got their email that stated that my bond was going to mature in a month's time and that I had decided to re-invest as I had not done this.  This is the email that I had received a month before the bond matured.

The advisor said that is the automated option but you can choose not to go with it, so it isn't forced on you.  It is not satisfactory as it does depend on you getting the correspondence and acting on it, else you will be moved to another fixed rate account. 

"Your one-year fixed-term savings are coming to the end of their term and will mature on 02 October 2024. ‌You’ve chosen to reinvest your money*, including any interest earned, so you don’t need to do anything – we’ll do it for you when the account matures.

What happens now? You’ll receive a letter with your account balance and your new interest rate soon. It’ll fully explain the reinvestment process and lay out all your options. In the meantime, if you want to find out more or have any questions, take a look below. *You may have chosen to opt out in the last six months. If this is the case, your money and any interest earned will move into an instant access savings account. You don’t need to do anything, we’ll do it for you.