Banks grace period

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Forums › Finance and wealth management › Banks grace period

mattwnz

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#245417 2-Feb-2019 14:45

I had a term deposit that the bank reinvested on Friday 25th Jan. I contacted them on Friday 1st feb to amend it, but they said they couldn't because it was outside the 7 day grace / cooling off period. However reading their terms, it say there is a 7 day cooling off period 'after' the reinvestment, which I would have thought the last day of the cooling off period was Friday 1st Feb. I guess it depends on that actual time of the day they reinvested it, but it doesn't state the time. This is the term from their terms. Are the bank wrong, or at the very least should they be using their discretion?

For Retail and Business Banking customers there is a 7 day ‘cooling-off’ period after you open or reinvest your term deposit. During this time you can cancel your term deposit, or change the term or amount of your investment.

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#2171857 2-Feb-2019 15:29

If the re-investment was on Friday, the TD expired on Thursday. The subsequent Friday is outside the cooling off period.

rugrat

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#2171858 2-Feb-2019 15:31

If you count Friday as day 1, the 31st is 7 days.

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eracode

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#2171924 2-Feb-2019 17:12

BlinkyBill: If the re-investment was on Friday, the TD expired on Thursday. The subsequent Friday is outside the cooling off period.

This is not correct - if a TD expires on a Thursday, the reinvestment day is the same day. If it was the next day, the investor would have lost one day’s interest. Anyway, the next Friday is outside seven days.

Sometimes I just sit and think. Other times I just sit.

frednz

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#2172009 2-Feb-2019 21:09

mattwnz:

I had a term deposit that the bank reinvested on Friday 25th Jan. I contacted them on Friday 1st feb to amend it, but they said they couldn't because it was outside the 7 day grace / cooling off period. However reading their terms, it say there is a 7 day cooling off period 'after' the reinvestment, which I would have thought the last day of the cooling off period was Friday 1st Feb. I guess it depends on that actual time of the day they reinvested it, but it doesn't state the time. This is the term from their terms. Are the bank wrong, or at the very least should they be using their discretion?

For Retail and Business Banking customers there is a 7 day ‘cooling-off’ period after you open or reinvest your term deposit. During this time you can cancel your term deposit, or change the term or amount of your investment.

What bank was it? Isn't this just typical of the way banks behave towards their customers? Even if the time period was a few hours outside the 7-day grace period, you would think any reasonable bank would use their discretion and let you amend your deposit.

I find renewing term deposits to be quite difficult at times because some banks just won't match the rates offered by other major banks, no matter how large your deposit is or how long you've been with the bank! However, usually BNZ and ANZ do match the rates of competitors, so I tend to recommend these banks to anyone lucky enough to have spare cash to invest!

mattwnz

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#2172027 2-Feb-2019 22:48

BlinkyBill: If the re-investment was on Friday, the TD expired on Thursday. The subsequent Friday is outside the cooling off period.

A reinvestment is basically a new investment, except it is automatic. So they set it up as a new term deposit sometime on Friday. The seven day cooling off period according to their terms is 'after' they open or reinvent the term deposit. So I would count day 1 as the next full day, which would be Saturday. Otherwise I would expect the term to specifically say that the day one is the date of the deposit, and you only have 6 days after that stated investment date. But the terms do say that the cooling off period is 'after' the investment occurs. If they only gave me a one day cooling off period after the investment date, I would expect that Saturday would be the last day, not the same day/friday the investment was made, as that wouldn't be giving me one day after it was invested.If they want to get technical, it could also depend on what time, as if they did the reinvestment at say 5pm, then 1 day 'after' would be up to 4.59pm on Saturday.

Part of the problem is their wording about the cooling off period is vague, and could be taken either way, which shouldn't work against the customer if they want their terms to be fair.

Although it is somewhat irrelevant because I did instruct them on Thursday the 31.1.2019, but they took until friday to me, and then had to ask me some other questions which I finally did on Friday. So they really should have done it on thursday anyway.

mattwnz

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#2172028 2-Feb-2019 22:51

frednz:

mattwnz:

I had a term deposit that the bank reinvested on Friday 25th Jan. I contacted them on Friday 1st feb to amend it, but they said they couldn't because it was outside the 7 day grace / cooling off period. However reading their terms, it say there is a 7 day cooling off period 'after' the reinvestment, which I would have thought the last day of the cooling off period was Friday 1st Feb. I guess it depends on that actual time of the day they reinvested it, but it doesn't state the time. This is the term from their terms. Are the bank wrong, or at the very least should they be using their discretion?

For Retail and Business Banking customers there is a 7 day ‘cooling-off’ period after you open or reinvest your term deposit. During this time you can cancel your term deposit, or change the term or amount of your investment.

What bank was it? Isn't this just typical of the way banks behave towards their customers? Even if the time period was a few hours outside the 7-day grace period, you would think any reasonable bank would use their discretion and let you amend your deposit.

I find renewing term deposits to be quite difficult at times because some banks just won't match the rates offered by other major banks, no matter how large your deposit is or how long you've been with the bank! However, usually BNZ and ANZ do match the rates of competitors, so I tend to recommend these banks to anyone lucky enough to have spare cash to invest!

It was ANZ. They did match the interest rates, eventually, but the whole process took almost a week. By which time it was past its grace period, so then said they couldn't do it, although would have to contact someone higher up to see. Banks are getting really difficult to deal with these days, because it seems impossible to get through to the right person, as it is all handled by a central contact centre, so I can't contact the right people directly.

eracode

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#2172039 2-Feb-2019 23:53

mattwnz:

BlinkyBill: If the re-investment was on Friday, the TD expired on Thursday. The subsequent Friday is outside the cooling off period.

[Snip] A reinvestment is basically a new investment, except it is automatic. So they set it up as a new term deposit sometime on Friday.

If the previous TD matured on a Thursday, the commencement date of the new TD is that Thursday - not Friday.

Sometimes I just sit and think. Other times I just sit.

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mattwnz

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#2172055 3-Feb-2019 01:49

eracode:

mattwnz:

BlinkyBill: If the re-investment was on Friday, the TD expired on Thursday. The subsequent Friday is outside the cooling off period.

[Snip] A reinvestment is basically a new investment, except it is automatic. So they set it up as a new term deposit sometime on Friday.

If the previous TD matured on a Thursday, the commencement date of the new TD is that Thursday - not Friday.

The new statement they sent me shows they definitely setup the new on Friday 25/1/2019 and that was the start date of the new investment. The terms on the back of the letter then state that the cooling off period is 7 days after that setup / start date. So day 1 after is Saturday, 2 days after Sunday, 3 days after Monday, 4 days after Tuesday, 5 days after Wednesday, 6 days after Thursday, 7 days after Friday. But when they word things so poorly like this in their terms, there is too much ambiguity. You would think that a bank would word things far more clearly, or even put the actual date that the cooling off period ends on the actual letter, so it is clear..

eracode

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#2172059 3-Feb-2019 04:24

mattwnz:

eracode:

mattwnz:

BlinkyBill: If the re-investment was on Friday, the TD expired on Thursday. The subsequent Friday is outside the cooling off period.

[Snip] A reinvestment is basically a new investment, except it is automatic. So they set it up as a new term deposit sometime on Friday.

If the previous TD matured on a Thursday, the commencement date of the new TD is that Thursday - not Friday.

[Snip]

The new statement they sent me shows they definitely setup the new on Friday 25/1/2019 and that was the start date of the new investment.

Then the old TD must have matured on the Friday. A TD being automatically reinvested doesn’t start the following day - that’s just not how it works. The new TD starts on the day the old one matures. Otherwise you’d be losing a day’s interest.

If the old one (let’s say it’s $10,000) matured on the Thursday and the new one started on Friday, your cheque account would show a credit balance of +$10,000 overnight on the Thursday, for which you would receive little or no interest. Was your account in extra credit on the Thursday night? Then if the new TD started on Friday, the bank would have taken the $10,000 back out of your account on Friday. I’m sure that’s not what you’ve seen.

Have a look at your bank statement and see what date there is a +$10,000 plus interest (maturing TD being credited to your account) and what date there is -$10,000 (new TD being debited from your account). Unless the bank is doing something screwy or unless you gave them instructions to the contrary, they will be on the same date.

Sometimes I just sit and think. Other times I just sit.

mudguard

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#2172065 3-Feb-2019 07:45

I thought the banks rang prior to the term deposit maturing? I often thought when setting up customer's deposits they were better off having them paid out into a cheque account on maturity rather than rolling over. There were so many left voicemail messages saying it's rolling over, never heard from them, then it was fixed automatically.

By having an amount go into the cheque account or similar it would force them to do something about it.

eracode

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#2172086 3-Feb-2019 09:18

mudguard:
I thought the banks rang prior to the term deposit maturing? I often thought when setting up customer's deposits they were better off having them paid out into a cheque account on maturity rather than rolling over. There were so many left voicemail messages saying it's rolling over, never heard from them, then it was fixed automatically.

By having an amount go into the cheque account or similar it would force them to do something about it.

When a new TD is set up, it will be set up to either:

(a) automatically roll over i.e. be reinvested on maturity (if the original TD was for, say, one year, it will be rolled/reinvested for another one-year period), or

(b) be paid into the customer’s cheque account on maturity.

When you’re arranging a new TD you need to tell the bank which of a or b you want. If you don’t tell them, they almost always select (a) for you - because they’re always keen/desperate to retain TD money. It’s the main way they fund their lending activities.

If it’s being automatically rolled over, they will not ring you - they’ll just do it and send you a confirmation in the mail.

Sometimes I just sit and think. Other times I just sit.

clevedon

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#2172105 3-Feb-2019 09:47

mattwnz: It was ANZ. They did match the interest rates, eventually, but the whole process took almost a week. By which time it was past its grace period, so then said they couldn't do it, although would have to contact someone higher up to see. Banks are getting really difficult to deal with these days, because it seems impossible to get through to the right person, as it is all handled by a central contact centre, so I can't contact the right people directly.

I have a business account and it avoids all this luckily.

I have a direct dial line and mobile number to my business manager at the bank, if I want to do anything at all I just ring him and it's sorted there and then or he rings me back within a short period of time if he has to get higher authority for something I want outside of the business accounts. If he is away for whatever reason, his stand in will do the same.

Behodar

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#2172155 3-Feb-2019 12:20

frednz: Isn't this just typical of the way banks behave towards their customers? Even if the time period was a few hours outside the 7-day grace period, you would think any reasonable bank would use their discretion and let you amend your deposit.

Indeed. I remember years ago when I was splitting a single fixed-term loan into separate fixed and floating. The idea was to put $x on fixed and $y on floating. They did it the wrong way around. I went straight into the bank (Westpac) on the same day and got the typical lack of customer service. "You signed this contract to make this new account" / "Yes, and that contract doesn't list the amount of money to put into the new account" / "Right but since it's under section 6(f)(ii) revision B it automatically gets $x put into it blah blah blah"...

They did fix it in the end, after I got my mortgage broker involved.

Lizard1977

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#2172606 4-Feb-2019 08:56

clevedon:

I have a business account and it avoids all this luckily.

I have a direct dial line and mobile number to my business manager at the bank, if I want to do anything at all I just ring him and it's sorted there and then or he rings me back within a short period of time if he has to get higher authority for something I want outside of the business accounts. If he is away for whatever reason, his stand in will do the same.

Getting OT here, but for all those complaining of poor customer service through contact centres I want to give a shout out to BNZ in Palmerston North. We moved our banking to them 8 years ago when we got our mortgage, and the service has been exceptional. We have a banking "manager" who is happy to correspond with us via email, and will usually respond within a few hours to any query I send through to her. We've had the same person for the past 8 years, and when she went on parental leave she transferred us over to her temp replacement, but picked us back up again when she came back. And this is just personal banking, not a business account.

Can't imagine what it would be like going back to "ordinary" customer service with a bank.

eracode

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#2172659 4-Feb-2019 10:35

With regard to personal banking, in broad terms the reality is that the level of personal service you get from a bank is directly proportional to the value that the bank attributes to your business with them. This comes down to the size or volume of business you have with them.

If you have up to average-size home loan or average volume of TD business, you will generally be dealing with a call centre - with no real ‘relationship banking’ - dealing with a different person each time you call.

With above-average volumes of business you may designated as a ‘premium’ or ‘priority’ customer and may enjoy access to a personal banker. Even without a designated personal banker, Premium customers can expect to get improved TD rates - higher than the bank’s published rates.

With very high volumes of home loan or TD business, you may be granted Private Bank status - which brings all sorts of benefits including a Private Banker one-to-one relationship banker who will give you the bank’s highest level of service including better home loan rates and/or higher TD rates.

Sometimes I just sit and think. Other times I just sit.

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