Thousands of savers will be rubbing their hands this month, as they reap the interest rewards of having locked money away.
Savers poured billions of pounds into fixed-rate deals this time last year. The most popular accounts — one-year fixes — are coming to the end of their term.
But make sure you don’t take your eye off the ball now, as I fear thousands could find their money gets locked away again or — perhaps worse — their returns are wiped out within months.
Between one month and two weeks before the end of the bond term, your provider should write to you to ask what you want to happen to your money.
If you don’t make your wishes clear, it is likely your money could be dumped in a lousy, easy-access account paying less that 1.5 per cent, or your money may be tied up for another year as it is automatically put into a new one-year bond.
Rollover trap: Savers poured billions into fixed-rate deals this time last year. But thousands could find their money gets dumped in a lousy, easy-access account paying less that 1.5%
NatWest says it will reinvest your money in another bond if you don’t tell it that you want your money back at least five days before the maturity date.
In most cases, money saved in fixed-rate Isas will be automatically transferred into an easy-access account at the end of the term.
This might give you breathing space, but be aware you will earn a measly rate while you decide what to do.
This time last year Santander had a top-paying one-year fixed-rate Isa at 4.15 per cent, which ran until April 1 or May 1 this year, depending on when you opened it.
You can tell Santander what you want to do with your money up to 28 days before the end date.
But if you don’t tell the bank what you want, your funds may end up in its Isa Saver account with a rate as low as 1.2 per cent.
If you don’t want to tie your money up again, transfer it to a better easy-access account. If you do want another fixed-rate deal, transfer your money to a different provider where you might earn 5 per cent.
On the High Street, you can get 4.75 per cent with Leeds or 4.7 per cent with West Bromwich Building Society.
With Halifax, if you don’t make your wishes clear before the end of a fixed rate term, your cash will end up in its Isa Saver with rates as low as 1.45 per cent for up to £10,000. A year ago, it paid 4.1 per cent.
With some providers — including NS&I, Yorkshire, Coventry and Skipton building societies — your fixed-rate savings might be tied up for a further term if you fail to tell them of your wishes.
You then have only a few weeks to get your money without charge, which can be as high as three months’ interest on a one-year bond.
A year ago, NS&I paid 4 per cent on its one-year Guaranteed Growth Bond. Its current version pays 4.15 per cent.
At the end of the term you have 30 days to get out. Miss that window and you can’t get your money out for another year.
