Offshore savings Updated:
The Co-operative Bank has come under fire from just about every angle recently, and now it's gone and angered those who hold offshore savings accounts with them – by closing its offshore fixed and variable rate bonds.
In August, the bank announced it was going to close its Guernsey branch in an attempt to "simplify the business", but assured customers of fixed rate accounts that the operation of them would not change and that they'd simply continue to maturity.
However, over the last few weeks, customers of the branch have received letters telling them that they needed to close their accounts and withdraw the funds contained, offering £100 to holders of fixed rate bonds who withdrew their money by 15 November. But, since then the accounts have officially closed, meaning savers who have yet to remove their money won't have earned any interest since 22 November.
The move has angered those who hold fixed accounts with the bank, as many did so for the competitive rates they were able to achieve – some received interest of 3% with similar rates now being incredibly hard to come by, and as they expected that rate to be "fixed" they're understandably upset.
The Co-op is the latest in a long line of banks to leave the offshore market, leaving savers with little to choose from. The bank has argued that it's no longer allowed to pay interest on fixed rate offshore accounts because, under the terms and conditions, there's no provision "for a minimum interest rate" and that the rules allow them to change rates at any time, subject to a 30-day notice period.
The bank went on to say that, as the letter announcing the change was dated 11 October, this effectively marked the closure of fixed rate accounts and therefore provided sufficient notice for savers to remove their money before they stopped paying interest.
It's a blow for offshore savers and yet another round of bad publicity for the already struggling bank, whose ongoing bailout plan is still to be finalised.
Keep up to date with Co-op changes by reading our short guide
Check out alternative offshore savings accounts
Staying onshore? Then see what fixed rate accounts can offer
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