Marcus ISA to ZOPA ISA

boomish

My wife & I want to increase our Marcus ISA accounts from 60k to 80k but keep it in one account with the best interest we can find, we may move in the next year so to keep it Easy access. I setup a new Zopa account & got the notification it was verified today (takes a few days) but when I went to transfer they don't support Marcus Bank, so I'm thinking can I transfer from Marcus to another bank that they do support? probably Santander as we have an existing savings account there , then to Zopa. I'm concerned the time it takes to transfer might not be worth it in missed interest or do they pay you interest from the day it arrives & leaves so it should be seamless. I can't see any minimum period before transferring back out on Santander website, though theirs is only 1.7% interest & they don't list Marcus to transfer in from either so you have to fill out a form. I suppose no one else has done this yet have they?
Alternatively I'm thinking I don't need it to be flexible, I do like to see the interest monthly but apart from that there is little difference to an Annual interest paid ISA maybe I should try Money box as that's a higher rate & does also allow transfers in. Any advice?

refluxer

Yes - you just need to find an ISA provider who also accepts transfers by post/cheque, as Marcus don't use the BACs ISA transfer service for electronic transfers.

I've transferred into Santander using a paper form in the past without issues, although you can expect this type of transfer to take a few weeks (15 working days in the max according to government guidelines). BACs transfers take a few days generally, in my experience.

When transferring, ISA interest should (in theory, at least) be backdated to the date the funds were released by the sending provider. When the transfer is done via post, this should presumably be the date of the cheque.

Just be aware that some people have been having issues transferring into Zopa recently, so you might want to have a look at the other Zopa-related threads in this forum. One important thing to bear in mind with Zopa is that they don't allow partial transfers out it wouldn't be wise to push too close to the FSCS limit unless you're prepared to transfer the whole lot out in one go when you reach it. This also means you'd have to pay a penalty to release funds held in any fixed pots, as all pots are considered to be part of the same ISA.

If you're also looking at the likes of Plum, Moneybox and Chip due to their high easy access ISA rates, make sure you read the T&Cs of those accounts very carefully because they all have various limitations and quirks which would make them unsuitable for some. 

Personally, I would split the kind of amount you're talking about into 2 and then you won't have to worry about the FSCS limit for a very long time. I'd also have a think about whether you actually need easy access to 2 x £80k, especially as interest rates are predicted to fall (and easy access cash ISA rates will undoubtedly follow suit if and when that happens). 

slinger2

I've got a 1-year fixed rate ISA with ZOPA which I'm happy with. However their all-or-nothing rule about transfers-out basically means I'd be stupid to open another ISA with them. Fair enough, plenty of other providers out there.

boomish

refluxer said:

Yes - you just need to find an ISA provider who also accepts transfers by post/cheque, as Marcus don't use the BACs ISA transfer service for electronic transfers.

I've transferred into Santander using a paper form in the past without issues, although you can expect this type of transfer to take a few weeks (15 working days in the max according to government guidelines). BACs transfers take a few days generally, in my experience.

When transferring, ISA interest should (in theory, at least) be backdated to the date the funds were released by the sending provider. When the transfer is done via post, this should presumably be the date of the cheque.

Just be aware that some people have been having issues transferring into Zopa recently, so you might want to have a look at the other Zopa-related threads in this forum. One important thing to bear in mind with Zopa is that they don't allow partial transfers out it wouldn't be wise to push too close to the FSCS limit unless you're prepared to transfer the whole lot out in one go when you reach it. This also means you'd have to pay a penalty to release funds held in any fixed pots, as all pots are considered to be part of the same ISA.

If you're also looking at the likes of Plum, Moneybox and Chip due to their high easy access ISA rates, make sure you read the T&Cs of those accounts very carefully because they all have various limitations and quirks which would make them unsuitable for some. 

Personally, I would split the kind of amount you're talking about into 2 and then you won't have to worry about the FSCS limit for a very long time. I'd also have a think about whether you actually need easy access to 2 x £80k, especially as interest rates are predicted to fall (and easy access cash ISA rates will undoubtedly follow suit if and when that happens). 

Thanks so much for the detailed advice, I did Moneybox in the end, unfortunately I didn’t read the T&C’s super finely, everything seems ok, I saw it’s restricted to only 3 monthly withdrawals & yearly interest. Ideally I’d prefer monthly but I think the higher interest is worth it. Good point on splitting the ISA amounts and possibly locking one away we had been thinking about that. Thanks again your a super star