Transferring ISAs

Legacy_user

Just wanted to warn people out there who might be thinking of transferring their Cash Isas to another provider to get a better interest rate.

I have transferred my Cash ISA from one bank to another but when I got my closing statement from my original ISA I noticed that it was closed on the 6th June but my ISA at the new bank was only opened on the 25th June thereby losing me 19 days of interest.

I'm still chasing this up to find out who is responsible for the lag but I'm astonished that my money can be making money for another financial institution whilst I'm losing interest on it.

So beware if you want to transfer your cash ISAs. Ask the banks to make sure the transfer process is quick so you dont lose too many days interest. I would accept 3-4 days but not more than that.

Milarky

There should be 'rules' to cover precisely this contingency [I wonder if there are any?]

May I suggest that 'double interest' should be paid by the ISA provider from the date you request a transfer until the date when  the receiving ISA provider confirm they have opened your account? That way ISA transfer times would very quickly improve, I suspect  :o

isasmurf

The Inland Revenue rules state that providers are allowed 30 days to transfer the ISA. It seems to be very hit and miss about which providers take a long time and whic do it straight away. When I transfered mine for the only time (so far) last year it was closed with the old provider and opened with the new one on the same day - although the new one didn't send me any documentation for 3 weeks after it was opened (although the period did include Christmas, so perhaps we can excuse them a bit).

Perhaps we should start a list like the who does/doesn't accept Amex thread in the credit card board to see if we can find out who takes a long time and who does it more or less straight away? What'd you think?

zain

Not really a transfer, but when i sent Abbey National a cheque for 3k towards my ISA they held onto it for about 3/4 weeks before cashing it. I queried this and they assured me that i would receive interest from the moment they got the cheque. This sounded entirely reasonable to me. So am suprised if you have lost interest- it is worth chasing.

System

UPDATE on transfer:

Just to let people know that on highlighting this issue to the the old ISA provider HSBC, they have put their hands up and claimed total responsibility for the lag time in transfer and will be compensating myself for the delay.

So if you are tansferring your ISAs then do complain if the the money is out of your name for too long a period, say 3+ days then highlight this to both providers to find out whos to blame.

Paul_Varjak

I think those cash ISA providers are often busy at the beginning and end of the tax years - particularly when their rates are highlighted as the best in the press.

Probably best to avoid buying your ISA at these times if you want to save on the hassle!

steady__eddie

A month ago, I transferred an ISA from Coventry to Lambeth incurring only 3 days loss of interest. On the 6th of April I applied online to Yorkshire to open an E-ISA, 2 weeks later I had still not received any documentation so they did not get my custom !

annesmudge

I recently asked First Direct to transfer ISA money which I had with Santander.
Santander say that they transferred on 21st december. First Direct say they received the monies on 31st december.
Neither is willing to accept responsibility for the time that it was 'floating' in the system. Obviously one of them was getting interest on it.
Do we just have to accept this type of treatment as 'the norm'?

rb10

Some banks - although, as you have found out, not all - will pay interest from the date that the originating bank put on the cheque, which would mean you don't miss out on any interest.

Others will transfer electronically, so the money is only in the system for a few days. I don't expect that First Direct are part of this system, as HSBC (their parent bank) are not.

cottager

If the TF funds were sent by cheque in the post, which still often happens, it doesn't sound out of the way really, given the Christmas postal rush -- may not have got there before the holiday, and there would have been no further business or processing done till 29th. If Santander sent it electronically on 21st then possibly there is a bit of a lag, as First Direct should have had it by 23rd, or 24th at the outside.

MaxHeadroom_2

I recently transferred my ISA from NatWest (my bonus interest finished) to First Direct. NatWest paid my interest up to 24th December and closed the account.

I rang First Direct on 2nd January because my ISA had gone into Limbo. I was told that they received it from NatWest on 31st December but because of the holiday period it could not be allocated to the account and to check again in a few days.

My new First Direct ISA is now showing funds allocated from NatWest on 5th January.:mad: