Nationwide - 1 year fixed rate ISA bond

BattleToy

I tried to transfer my 1 year fixed rate ISA bond from Nationwide to Natwest but the staff member from Nationwide told me on the phone that I needed to give 90 days notice or loss 90 days interest. I thought it was still worth transferring my ISA to Natwest with higher interest rate.

When I went to my local nationwide bank, the woman told me that I am not allowed to transfer my ISA to any banks because of my fixed year ISA bond status. She also addressed that I would loss my ISA status if I closed my ISA with them and open another ISA with other bank. It means that I cannot have tax free for my lump sum of ISA amount. Is it true? I didn't hear this before. I asked the nationwide staff about my ISA status on phone, they gave me different answers.

The problem is that I can't find the terms and conditions about my fixed year ISA bond on their website.

anyone help?

Baldur

BattleToy wrote: »

She also addressed that I would loss my ISA status if I closed my ISA with them and open another ISA with other bank. It means that I cannot have tax free for my lump sum of ISA amount. Is it true? I didn't hear this before.

You cannot close a Cash ISA without losing its tax-free status - transfers must always be arranged through the new ISA provider.

The problem is that I can't find the terms and conditions about my fixed year ISA bond on their website.

See http://www.nationwide.co.uk/savings/cash_isa/fixedrateisabonds/summary/

Paul_Herring

the woman told me that I am not allowed to transfer my ISA to any banks because of my fixed year ISA bond status

Well, yes. The whole point of the fix, is that both the customer and the bank have some security in knowing that the rate isn't going to change for a year, and the money isn't going to dissappear.

There has to be some penalty for early removal, and it would appear Nationwide's is that you must close the ISA.

BattleToy

Thanks Guys!

After reading the terms and conditions of 1 year fixed rate ISA bond, now I know that I will only incur three months interest penalty for early closure. But it does not mention about the loss of ISA status.

So, I am very unhappy why the woman at the bank told me that I would definately loss my ISA status (all money cannot be tax free again) if I insist to transfer my ISA to another bank because of my fixed year ISA Bond. I couldn't believe that she gave me the wrong information of ISA bond. Actually, I kept telling her I should have only loss the interests not my ISA status. But she was quiet rude and very firmed to say that I was wrong.
Have you guys heard about this kind of ISA status.

If there is no such thing of lossing ISA status because of ISA transfer. Now, I have delayed a week to apply for Natwest ISA with higher interest rate because of her incorrect information.

Do you think I should go back to the bank to complain about her to give me incorrect information. She should have fully understood her banks' products before giving her customers advice?

martinman3

BattleToy wrote: »

Thanks Guys!

After reading the terms and conditions of 1 year fixed rate ISA bond, now I know that I will only incur three months interest penalty for early closure. But it does not mention about the loss of ISA status.

So, I am very unhappy why the woman at the bank told me that I would definately loss my ISA status (all money cannot be tax free again) if I insist to transfer my ISA to another bank because of my fixed year ISA Bond. I couldn't believe that she gave me the wrong information of ISA bond. Actually, I kept telling her I should have only loss the interests not my ISA status. But she was quiet rude and very firmed to say that I was wrong.
Have you guys heard about this kind of ISA status.

If there is no such thing of lossing ISA status because of ISA transfer. Now, I have delayed a week to apply for Natwest ISA with higher interest rate because of her incorrect information.

Do you think I should go back to the bank to complain about her to give me incorrect information. She should have fully understood her banks' products before giving her customers advice?

You are correct that you can transfer this ISA to another provider without losing ISA status but with the loss of 3 months interest.
Please note that you always lose the interest, you cannot provide notice to prevent this.

From T&C

22. Subject to early access charges on Fixed Rate ISA Bonds, if you wish to transfer all or part of your ISA to another ISA Manager we will transfer the account within the time stipulated by you or within 30 days of receiving the request from your new provider, whichever is the longer. We will notify you if, due to any failure to satisfy the provisions of the HM Revenue and Customs ISA Regulations, the ISA has, or will, become void.

43. The account can be closed prior to maturity, subject to the early access charge shown below. Please note these charges do not apply:
(a) on closure, or transfer to another cash ISA, during the first 14 days after the account opening, following receipt of a Cancellation Form which can be obtained from any Nationwide branch and must be returned to a Nationwide branch.
(b) on closure due to the death of the account holder. Time remaining More than 3 yearsBetween 2 & 3 yearsBetween 1 & 2 yearsLess than 1 yLoss of interest 180 days 150 days 120 days 90 days
The funds in the account, together with any interest earned and less the early access charge (if applicable), will be paid to you within the time stipulated by you or within 30 days whichever is longer.

Personally, I would not complain about the incorrect response as the Summary of this product implies that closure is the only option.

The real question is why do you want to transfer as surely the penalty is greater than the interest gained ?

Milarky

martinman3 wrote: »

The real question is why do you want to transfer as surely the penalty is greater than the interest gained ?

That's correct. The best you can do is 7.32% [not fixed] vs 6.15% . The least difference is 6.67% - 6.15%

1.18% for 12 months vs 1.54% immedate loss [1/4 of 6.15% = 90 days lost interest] ... a loss!!!

..it doesn't add up..

On the other hand if you could open your NatWest ISA by transfer if you have another ISA account, apart from the Nationwide, that is no-notice etc then your are 'in' for the purposes of the bonus rate and period. The Nationwide Bond can then be transferred later (as it matures within the year) and done so by giving (say) 30 days notice before the expected maturity date - so that even a slowcoach like Nationwide has a chance of moving the transfer on the very same day as the fixed rate will end.

(Do you happen to have any other available ISA accounts to transfer? - this NatWest offer isn't going to be open much longer)