Withdrawing from your Lloyds TSB Cash ISA

by_eck

A warning for investors in the Lloyds TSB Cash ISA who want to withdraw from or close their account: if you haven't another Lloyds TSB account, or aren't intending to transfer the funds into another ISA, beware of restrictive practices in accessing your money.

My mother had a LTSB Fixed-rate Cash ISA which, on maturity this month, was automatically converted to their standard cash ISA. Deciding to close the account entirely, she visited her local branch to arrange a transfer to her (non-Lloyds) current account. Not possible, she was told; the only options for withdrawing her money were either by cheque or cash. This was in contradiction to a clause in the ISA Terms and Conditions which clearly says "The withdrawal can be in cash, cheque or can be transferred to another Lloyds TSB or other account. If you request a cheque there will be a charge, which is currently £20.”

Despite pointing out the T&Cs, they wouldn't allow her to set up a bank transfer. Later the same day, I telephoned Lloyds' ISA department, who told me the same thing. Since my mother needed quick access to her money for an alternative investment, and refusing to pay Lloyds' extortionate £20 fee for payment by cheque, she was forced to withdraw the funds in cash. It was not a pleasant experience to walk through town with £15,500 in £20 notes to deposit in her bank.

I have lodged a complaint with Lloyds and will post the outcome in due course. Meanwhile, other investors who are thinking of closing their account without transferring the funds to an another ISA, take note!