The society had always written to bondholders a few weeks before the maturity date to tell them about current fixed-rate offers. But it stopped doing so about six weeks ago because the number of investors involved made the process cumbersome.
John Gully, marketing director, said it was also wary of offering a fixed rate several weeks ahead of the start date in case interest rates fell and the society could no longer offer the rate when the time came.
Elizabeth Shaw, from Wilmslow, Cheshire, was one of the earliest investors in the society's fixed-rate bonds. 'I had got used to them contacting me,' she said. 'But when the end of the 12 months came this time, there was no word. I contacted them and discovered that the money had been transferred from the bond, where it had been earning 10 per cent, to the instant access account, where it was earning peanuts.'
From next month the society plans to write to bondholders to remind them that the bond is about to mature and tell them funds will be transferred to the instant access account.
'Investors can then go into a branch near the maturity date and check on current rates to see if they want to start another bond,' Mr Gully said. 'Otherwise we put the money into an instant access account so investors can withdraw whenever they like.'
The current bond offerings at Portman for a minimum investment of pounds 500 are six months at 7 per cent gross or 12 months at 6.5 per cent gross. The instant access account pays 5.25 per cent gross on pounds 500.
Nationwide Building Society is closing its One Year Bond and Capital Bond Direct. But it is launching a new 60-day notice account with a minimum investment of pounds 10,000 on Monday. It pays from 7.2 per cent, up to 8 per cent gross on pounds 100,000 or more. There is also a monthly income facility.
The account allows one penalty-free withdrawal a month of up to pounds 5,000. Other withdrawals can be made giving 60 days' notice or incurring a 60-day interest penalty. If no withdrawals are made during a calendar year a 0.5 per cent bonus is paid.
Customers in discontinued accounts (except fixed-rate bonds) can transfer to Bonus 60 without notice or penalty. The society is writing to these investors and to investors in CapitalBuilder and Monthly Income to tell them about the new account.
Abbey National's 90-day acount allows only two withdrawals a year on sums below pounds 10,000 or six a year on larger deposits. It pays 4.35 per cent net on pounds 10,000 to pounds 25,000. Halifax's Premium Xtra 90-day account allows one free withdrawal a month of up to pounds 5,000. It pays 5.4 per cent net on pounds 10,000.Reuse content