HSBC e-ISA

ShelfStacker wrote: »

The catch is that you have to have an HSBC current account to open one, you can't transfer in from other ISAs and it has to be opened online. However, said rate isn't to be sniffed at, especially when (unlike Barclays' deal) it doesn't appear to be a limited-period bonus.

https://www.hsbc.co.uk/1/2/personal/savings/cash-e-isa

Just to defend my employer here, having an HSBC current account isn't really that much of a catch given that the current accounts are free unless you want the features of a Plus account. I suppose the biggest downside is that they'll have to do a credit check on you prior to opening the account, but for most people that shouldn't be much of a problem.

It's not quite up to the dizzying heights of some of the other providers, I'll grant you that, but it gives existing HSBC account holders somewhere to go if they want to keep all their accounts in one place. I think this is something people probably value quite highly.

OK, end of my highly biased post

I've just got off the phone from HSBC and they have confused me.

I already have a Cash ISA with HSBC that I've used over the past 6 or so tax years. For this new tax year, I want a better rate of interest, so would like to open the e-ISA. However, the person on the phone said I couldn't have more than one ISA open. I said that I thought you could open a new ISA with each new tax year. Since I've not used this year's allowance yet (it's only been a day or two after all!), I wanted to open the e-ISA for this tax year.

However, the person was convinced I would be unable to open the e-ISA if I already had any HSBC Cash ISA open with them.

Since HSBC do not even allow transfers in to the e-ISA, does that mean the e-ISA is not available to any current HSBC customers with an open Cash ISA from previous tax years?

PauliPauli wrote: »

If it shows up on my list of accounts this week, next month I'll just send them an online message asking to "amalgamate them in to my one e-ISA account"

I rang again and was told I wasn't informed correctly. They didn't see a reason why I shouldn't open a new ISA for this tax year. She also asked the Team Leader to confirm this and they agreed it should be fine.

Unfortunately, PauliPauli, transfers in are not allowed. That's stated all over the place, so they won't be able to amalgamate my previous year's ISA savings. Sniff!

Hi,

I had emailed them and this is the reply I got from them:

=====================================
Thank you for your e-message received 6 April 2008

Please be advised that ISA regulations state that ISA account is limited to one per person per tax year.

I notice that you already hold Cash ISA. Your Cash ISA cannot be converted to e- ISA.

You may have to close your Cash ISA and open an e- ISA subject to criteria via PIB.

We are offering an attractive interest rate, currently 6.00% AER for e- ISA. Transfers in from other Cash ISAs are not permitted.

Please be advised that the monthly gross interest rate of Cash ISA is as follows:-

Upto GBP9000 4.41%
GBP9000 to GBP15000 4.65%
Above GBP15000 4.94%
==============================

This is I feel completely misleading as If I close my Cash ISA I lose the taxfree benefit, now why would I want to do that, I still should be allowed to open the new e-ISA for this year without effecting my previous years ISA...

Is my understanding correct?

Please suggest.

simpleguy_blr wrote: »

Hi,
This is I feel completely misleading as If I close my Cash ISA I lose the taxfree benefit, now why would I want to do that, I still should be allowed to open the new e-ISA for this year without effecting my previous years ISA...

Is my understanding correct?

Please suggest.

After my initial confusing phone call, I was assured I could open an e-ISA separately in this new tax year while keeping my previous year's Cash ISAs with HSBC available (as you'd expect) and it was confirmed by the Team Leader too.

They further added that the only reason they suggest you don't open a separate ISA each year is because the interest rate at HSBC gets better the more you put in over the years. But they agreed that this e-ISA is a better rate of interest than the other account anyway, so it would be wise to open this new account. Hope that all makes sense!

So if, after I have now opened an e-ISA, I am told that my previous ISA savings have been removed or that they have refused to complete my e-ISA application based on ISAs from previous tax years, I will be seeking further advice.

As far as I can see, all should be well. But you're absolutely right, it's ever so vague and potentially misleading!