Bradford & Bingley BS Bond

Bluebird1_2

My wife invested in 1 year savings bond in January this year. The investment was £40k. With trouble at B&B she wanted to pull out £10 or even £5k as £35k is safe with FSA cover. However terms say no withdrawals until maturity except on death. Does this mean that even if B&B cease to trade we are prevented from closing account. Previous Bonds could be closed but with penalties. This was not explained at the time of opening account and only came to light with subsequent information. Anyone else experienced this and what have you done.

RayWolfe

If that's what the T&Cs say, then that is what you agreed to when you signed up. Fixed term deposits usually pay a higher rate but the downside is that they are fixed term.

KeithEssex_2

Bluebird1 wrote: »

My wife invested in 1 year savings bond in January this year. The investment was £40k. With trouble at B&B she wanted to pull out £10 or even £5k as £35k is safe with FSA cover. However terms say no withdrawals until maturity except on death. Does this mean that even if B&B cease to trade we are prevented from closing account. Previous Bonds could be closed but with penalties. This was not explained at the time of opening account and only came to light with subsequent information. Anyone else experienced this and what have you done.

Personally if I was you I would simply wait until January and reduce your exposure then. With the additional capital that they have/will receive there should be no problems during that timescale.

The Government is already talking about increasing the £35,000 compensation level anyway and would definitely step in if there were any problems (as per Northern Rock).

You might find they raise it before the end of the year which would solve your problem.

I doubt that you could successfully argue about not knowing the T&Cs. Just make sure that next time you chose a bond with an exit route (probably with a 90 or 120 days loss of interest).

Longer term they are likely to get bought out.

The people who might need to worry are the shareholders who would lose money if they sold their shares right now !

Sit tight - and try not to worry about it.

p.s. I have a similar situation with the Halifax waiting for Bonds to mature. I could break them for a cost but I am not going to waste the money !!

KeithEssex_2

RayWolfe wrote: »

If that's what the T&Cs say, then that is what you agreed to when you signed up. Fixed term deposits usually pay a higher rate but the downside is that they are fixed term.

To be fair some of them do have break clauses but they cost you many days worth of interest to do this.

RayWolfe

Yep. For example, Halifax charge 6 days for every month short, Nationwide 160 or 90 days, but many others - WestBrom - do not allow any early closure except on death ... at which point, failure to read the T&Cs is a little academic!

Mr_£

To be perfectly fair to B&B they do make it reasonably explicit on their website that you cannot have any withdrawals until maturity. Equally the brochure is available on there too and that spells it out too. Lessons to be learnt here I think.

I wouldn't worry too much about your cash, the likely hood of the Govt. letting another NR happening is extremely slim.

http://www.bradford-bingley.co.uk/savings/product/1-year-fixed-rate-bond-issue4.asp

nomoneytoday

Of your £40,000 bonds, £35000 + 90% is already secured by the government - coming in at £39500