KBC would not allow me early access to a fixed term deposit in a crisis

H

hal 9000

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beware of opening fixed term deposits with no access to any of your money over the period of deposit of lump sum with the bank. My wife and I have a fixed term deposit with KBC maturing in Sept 2017. About one month ago we had a financial crisis and wrote to KBC head office asking to be released from our contract and we were prepared to accept a penalty charge and NO Interest on the sum deposited. KBC refused to release any money. They operate under the Investment to loan ratio i.e. For each €100,000 on deposit with KBC at an interest rate of 1.45% KBC can lend €1,000,000 at an interest rate of 6.30%. I asked KBC could I 'borrow' or apply for a loan of €50,000 until Sept 2017 using my money in the Term Deposit Account as security ( the amount on deposit was in excess of the amount sought on loan). KBC refused to lend any money to help us with our crisis, even though we have more on deposit than we were asking to borrow. My advice is do NOT open a fixed term deposit account using All your savings as if there is a crisis you will not be able to access that money from KBC. By the way KBC Bank is totally within it's rights to refuse, they just lack the humanity to deal with customers as people rather than 'sources of income.
 
Attitudes to early access to term deposits vary significantly across banks. KBC have one of the stricter approaches.

Not willing to offer a loan against the deposits as collateral is a strange and harsh policy.
 
It is wise to have a number of fixed term accounts falling due at different times of the year.
Not offering the loan makes little sense.
 
I needed to break a term deposit in PTSB for a significant amount a while ago. I have to say I was very impressed with how understanding they were - I would have been willing to forfeit all interest earned up until that point, but I only had to forfeit a relatively small amount in the finish. Also, there was no hassle about it.
 
I thought that the reason they have fixed term accounts is that if there is a sudden run on the bank, they won't run out of money.

In the absence of a run, I have no idea why they are not more flexible with depositors.

ptsb will probably get gravitygirl's business in the future.

hal probably won't deal with KBC again.

Brendan
 
Given that both PTSB and KBC offer the market leading rate of 0.75% AER fixed on a 1 year term deposit, given the above experiences, the PTSB offering seems a lot more appealing.
 
CiaranT said:
....Not willing to offer a loan against the deposits as collateral is a strange and harsh policy.
Click to expand...

Too much work for too little return perhaps ?

Also, (and without knowing the original posters circumstances so absolutely no disrespect intended here), the original poster may not have met the normal criteria to be approved for a loan (regardless of it's short term nature, the capital being protected by way of security over a deposit account etc.). To take an extreme example, how would the Central Bank feel if they thought KBC were lending based on security, rather than affordability ?
 
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