Will I lose any interest if I transfer to a new provider?

Gozzett

I am currently looking at transferring my savings from a Direct Cash ISA with National Savings & Investments (NS&I) - at a now low rate of 4.8% (paid annually) - to the Natwest Cash ISA which gives a much better rate of around 6.67% (this includes a 12 month 2% bonus - paid monthly).

I was just wondering that, as I am halfway through the tax year, (and therefore would not be getting my annual interest paid until April 2009) if I transfer the whole balance to Natwest will I lose the accumulated interest for the tax year so far? (for example, the interest between April 2008 and now) OR will NS&I pay me the interest for that period, then transfer the balance?

Please help!!

gil13

I think you will find that the current provider will work out what you have contributed this tax year and earlier years will then work out the interest for this year up to transfer date and then arrange to move the funds to new provider. There may well be loss of interest really depends on when the new provider considers the funds in and current product t&c's. Also if you have contributed already in this tax year with your current provider, think you will find that you will need to stop and wait until the new isa is set up and all transfered before you can recommence contributions to the new provider (you can only pay into one cash isa in any one year) for the remainder. Another option would be to max up with your current provider and then instruct the transfer.

Paul_Herring

Any accrued interest will be added to the balance when you close the account, just prior to transfer.

The only interest you'll lose will be during the actual transfer period.

Gozzett

Cheers, thanks for your help!