Halifax ‘punishes new checking account clients’ with penalty costs
Some customers face being hit with an interest penalty
Halifax has spelled out the rules for one of its savings accounts, warning customers they could be hit with penalty fees. A customer reached out to the bank after opening a Fixed Saver account, which has a 3.75 percent interest rate for a one-year lock-in.
The account requires savers to deposit at least £500 within 10 days of opening, and you can put in as much as you like during this window. But the customer had a change of heart, asking over X: “Can I close it online via the app? Only just opened it, it’s the wrong one I’ve opened and put some money in it.”
Halifax was quick to respond, cautioning that shutting it down early might mean an extra bill: “This would need to be closed in branch as early closure would mean you would pay an interest penalty.” The saver was gobsmacked to learn about the potential charge, probing further: “What is that? I’ve only put [in] £400.”
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They pressed on, asking: “How much would I have to pay? It’s an error accidentally made opening the wrong account up, why do I need to pay a penalty?” Halifax explained that since it’s a fixed one-year deal, the fee would be for 90 days’ worth of interest.
Under Halifax’s terms, pulling the plug early on a one-year fixed rate account means you have to pay 90 days’ gross interest. Even bigger charges apply for other fixed accounts, with 180 days’ worth to pay for a two-year account and a 365 days’ worth if you’ve signed up for a five-year account.
The customer voiced their frustration at being slapped with the extra bill, saying they were being “punished for opening wrong account”. They went on to say they hoped charges could be waived when they visited the branch. In response, Halifax provided some comfort: “Apologies for any confusion. There is a cancellation period of 14 days. Customers are entitled to change their mind without financial loss, so any early closure loss of interest will need to be refunded to customer.”
The customer then asked again if the account could be shut down online, given their branch was miles away. Halifax clarified: “A fixed account would need to be closed at a branch please.” Savers can manage their Fixed Saver online, on the app, or over the phone. Once you open the account, the term starts immediately and you have 20 days to make any number of deposits, after which you can’t make any more. You can hold up to £9million in the account.
