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HSBC e-ISA
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# 1
ShelfStacker
Old 06-04-2008, 11:01 PM
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Default HSBC e-ISA

HSBC appear to have quietly tweaked their Cash Mini ISA to coincide with the start of the new tax year. It's now called an e-ISA, and pays a respectable 6% on all balances of 1 and over. They pledge to pay no more than 1% below the BOE base rate.

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
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# 2
Aegis
Old 07-04-2008, 7:21 AM
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Quote:
Originally Posted by ShelfStacker View Post
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
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# 3
PauliPauli
Old 07-04-2008, 9:37 AM
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I'm in process of transferring a cash ISA to them (4.75%), I've asked them to "upgrade" this to a Cash e-ISA at 6% when it trasnfers in

If they don't agree is their any rules in stopping me opening a new Cash e-ISA account with them online now before the other ISA transfers in, then let them sort out the "mess"
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# 4
grifty
Old 07-04-2008, 9:52 AM
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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?
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# 5
PauliPauli
Old 07-04-2008, 10:05 AM
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Quote:
Originally Posted by grifty View 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?
From my dealings with HSBC, they are such a "huge giant" sometimes it better to just go ahead and do online applications ignoring what the person on the phone says.

Just applied for an e-ISA, the only point I had to accept is "have a subscribed to another ISA in the 2008-2009 tax year", the answer being no, so opening has not broken any goverment ISA rules.

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"
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# 6
grifty
Old 07-04-2008, 10:24 AM
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Quote:
Originally Posted by PauliPauli View Post
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!
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# 7
PauliPauli
Old 07-04-2008, 10:34 AM
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oh well...

Although I might be lucky, as my previous years ISA hasn't transferred in yet, probably wont till next week, so who knows what the computer will decide to do next week, when it see's my existing e-ISA their
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# 8
simpleguy_blr
Old 07-04-2008, 10:38 AM
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Question Reply from HSBC

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. :confused:
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# 9
PauliPauli
Old 07-04-2008, 10:51 AM
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HSBC have always been a "business not a customer orientated bank" in this regard why would a business start paying more for "existing ISA monies" at a loss, there really only after "new monies"

Personally I still bank with them, for security/convenience/time with them/excellent online banking system, and I do keep a eye on them... For example they have sneekily reduced their old "online saver" account form 5.75% to 5.6% (there's even two versions of this old "online saver" account as well to confuse matters even further) !!

I used to be very cynical when it came to banks .. now i'm just practical
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# 10
grifty
Old 07-04-2008, 11:03 AM
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Quote:
Originally Posted by simpleguy_blr View Post
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. :confused:
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! :confused:
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# 11
mac12
Old 07-04-2008, 11:23 AM
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Has anyone had any problems with HSBC ISAs? I quite interesting in this e-ISA as I already have a current account with them which I am happy about. Their rates on other savings haven't always been the best but I was wondering if I should get this ISA or top off my NS&I ISA for 08/09.

Thanks!
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# 12
grifty
Old 07-04-2008, 11:38 AM
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Quote:
Originally Posted by mac12 View Post
Has anyone had any problems with HSBC ISAs? I quite interesting in this e-ISA as I already have a current account with them which I am happy about. Their rates on other savings haven't always been the best but I was wondering if I should get this ISA or top off my NS&I ISA for 08/09.
I think the rate of interest on the HSBC e-ISA (6.00% AER) is currently better than the NS&I rates (4.85% AER for Cash ISA or 5.55% AER for Direct ISA). I've not had a problem with my money at HSBC.

And, despite the worries we've had on this thread about the e-ISA, it sounds like you aren't in the same boat (i.e. you don't already have an ISA with HSBC), so you should be absolutely fine to apply without concern.

Last edited by grifty; 07-04-2008 at 11:41 AM.
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# 13
mac12
Old 07-04-2008, 11:44 AM
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Thanks Grifty for that.

I was wondering - how comes in the website is says it is 5.84% Tax Free but 6.00% interest? Isn't is all tax free?
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# 14
grifty
Old 07-04-2008, 12:08 PM
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mac12, I'm not very good at this malarkey, but I think that 5.84% is the 'gross' interest. If you ask for the monthly interest to be paid into another account, you will only make 5.84% interest over the year.

However, if you allow the monthly interest to accrue in your e-ISA account, you will earn interest on the interest (called 'compound interest'). Over a year, that would amount to 6% interest (tax-free) in total.
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# 15
mac12
Old 07-04-2008, 12:10 PM
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Ahhh Ha!

I got it, that makes perfect sense. Thanks again!
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# 16
Rich1976
Old 07-04-2008, 2:14 PM
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What happens to ISA's opened in previoius tax years? I understand that no further money can be added to it if I was to open the HSBC ISA but would I still be able to withdraw money from last year's one ( which is with Nationwide) or does need to be left completely untouched?

Thanks
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# 17
ShelfStacker
Old 07-04-2008, 7:28 PM
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Quote:
Originally Posted by Rich1976 View Post
What happens to ISA's opened in previoius tax years? I understand that no further money can be added to it if I was to open the HSBC ISA but would I still be able to withdraw money from last year's one ( which is with Nationwide) or does need to be left completely untouched?

Thanks
There's no limits on withdrawals other than the ones set by the banks (e.g. notice). However, you can't replace any money you've withdrawn.
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# 18
simpleguy_blr
Old 08-04-2008, 10:02 AM
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Quote:
Originally Posted by mac12 View Post
Thanks Grifty for that.

I was wondering - how comes in the website is says it is 5.84% Tax Free but 6.00% interest? Isn't is all tax free?
Hi this is the reply I got from them when I asked them the above question.

===========================================
The AER refers to the Annual Equivalent Rate which is the overall interest rate should the Gross interest be compounded each month. The current Gross rate which is 5.84% which is tax free and this is the return you would see in your account.
===============================================

Which confirms what Grifty has already explained.

Cheers
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# 19
brookerbabyisababy
Old 08-04-2008, 2:56 PM
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I've applied for this recently. Still haven't heard anything from them. Is anyone else account showing up on online or is it just me? I remember it saying 3 working days?
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# 20
brookerbabyisababy
Old 08-04-2008, 6:29 PM
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looks like its only me who has applied for this then.
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