Bank and building society interest - Example 8

Mrs Henley opened an account for her son James when he was young and, because he could not, and never would be able to, look after his own money, she opened the account with herself as trustee.

The account was in the name ‘Mrs Henley re James Henley’. When James turned 16 the bank wrote to say they were cancelling the R85. Mrs Henley rang the bank and explained that James was mentally incapacitated and couldn’t look after his own money.

The bank knew there were special rules for these accounts and left James’s account registered for interest without taken off. The bank did not need to cancel the form R85. If Mrs Henley had not contacted the bank they would not have known, and would have cancelled the form R85.

If this had happened, and Mrs Henley found out about this rule at a later date, Mrs Henley could ask the bank to reinstate the original R85 or she could sign a new one on behalf of James.