BMW performance ISA - keep or transfer?

davieh

Hi
I have a £3000 ISA with BMW that matures in September 08 (I only started ISA investing in Sept 07). I'm ready to then add in my £3600 for this year, but I'm not keen on their current ISA rate. Therefore I'd like to be able to combine my potential lump sum of £6600 and transfer it to somewhere with a better rate.

Some questions:
To anyone who knows the BMW performance ISA, can/how do I do this?

To anyone who has done similar, can you recommend a suitable ISA?

To anyone who knows ISA's better, should transfer of ISAs etc ideally happen at the turn of the tax year (am I losing out by having my ISA maturing in Sept?)

All advice greatfully received and apologies for any repetition (am happy to be redirected to previous posts answering my questions)
Thanks

debbie42

You can transfer your existing ISA to a provider that accepts transfers at any time. I'm not familiar with the BMW ISA but it sounds like it may be better after maturity?

Most providers allow transfers without new funds, but some want new funds.
I'd have thought it better to put this year's allowance directly into a new ISA (which allows transfers) then transfer your old ISA into that.

There is an excellent thread listing all available cash ISAs, I'll find the link.
(edit: it's here)
I've said it before and I'll say it again, but it really should be a sticky!

debbie42

davieh wrote: »

To anyone who knows ISA's better, should transfer of ISAs etc ideally happen at the turn of the tax year (am I losing out by having my ISA maturing in Sept?)

Forgot to answer this.

Ideally you'd stick your allowance in at the beginning of the year to maximize interest, but not everyone can do that.

You might actually be better off in that the transfer might be easier, due to fewer transfers going on at that time (don't count on it, though: there are some nightmare threads on here!).

runciblespoon

As I recall the BMW Guaranteed Performance ISA was 6.7% fixed for a year. BMW's site says:

What happens when the ISA matures?

When your Guaranteed BMW Performance Cash ISA matures it will automatically transfer to a new BMW eSaver Cash ISA, where BMW eSaver Cash ISA terms and conditions will apply.

The eSaver is currently at 5.25%. Their other ISA offerings aren't much better. I don't know whether they'll write to inform you of this, but after their transfer date you can just issue a transfer from another provider and they'll do the rest. Since there's a 45 day interest penalty for withdrawals from the fixed rate ISA it's best to wait until it turns into an eSaver ISA in September.

As Debbie42 says, there's no particular reason why you can't open a new ISA now and request to transfer in the BMW money when it becomes available. Unless the new account needs more than £3600 starting balance, in which case you might have to wait.

davieh

Aaaah! I see! So I'll leave the BMW ISA to do its thing for the next 4 weeks and in the meantime I'll open a new ISA that accepts transfers in. I guess it would make sense to wait 45 days after BMW maturity so I dont lose out on any of the 6.7% interest (?). Then put this money into my 08/09 ISA and its job done.

Thanks for the info

runciblespoon

I don't think there's a particular need to wait 45 days. Once the Guaranteed Performance ISA has converted into an eSaver ISA, there's no longer any interest penalty. So you can transfer it straightaway. If the GP ISA matures on 5th September you can issue a withdrawal notice on 6th. No need to waste 45 days at the lower rate.

Madgpol

My Partners Isa is due to mature on 5th Sept. Like the original poster I was intending on moving the ISA elsewhere to achieve a better rate.

However, today we have received a letter stating the ISA will automatically be moved to the BMW Performance Isa (Issue 7) paying 6.30% aer fixed until 19th Nov 2010 if we do nothing.

Saves all the hassle of a transfer and we get a good rate for the next 2 years. :beer:

Can also transfer in previous years ISA's to boot.

Well done BMW (Newcastle BS) on retaining a customer who would have gone elsewhere.

runciblespoon

Is that a fixed term deposit, or can you withdraw funds at any time? While it's a good rate, it's a bit sharp to lock people's money away when they were told it would mature into an easy access ISA.

Madgpol

From the letter

'Following the 28 day full access period,withdrawals are allowed subject to 60 days notice or loss of interest'.

Works for us as we are not looking to touch any ISA money we have invested. Personally I think it is a very competative offer when you look at Interest rates over a 2 year period.

Easy Access ISA pays way less than 6% so I think it is their way of retaining the funds. Happy to play that game.

Agent_C

I've got the same letter, and I'll be sticking with the BMW ISA too. I have other savings, and the ISA will be the last thing I spend, given that it's tax free.

I've stuck this year's £3600 allowance into an Icesave ISA paying 6.1%. I'm considering whether to transfer this into the BMW ISA, as it does accept transfers in. The advantage of the Icesave one is that there is no penalty for withdrawals; on the other hand, I'm unlikely to need the money before the BMW one matures in 2010. Hmmmm....

catfriend_2

Hi Can you help me ? I have the BMW ISA coming out 5th Sept too- maximum of £3000 invested and I have already taken out an ISA for this year with Yorkshire Building Society for £3,600 over a 4 year term. Can I hold the two ISAs still in this tax year or do I have to convert my BMW ISA into cash/nonISA? Can I take part of the BMW ISA in cash and leave the rest in without losing my taxfree interest? If I do will I then be unable to add to it later in the year because it will count as this years ISA and I already have the max allowed? I am new to ISA's and get confused - please help.