5 year fixed rate ISA at 5% - Newcastle BS!

Woodyrocks

I ralise that this is an oldish thread but I am pretty sure that I have both the 5yr bond & ISA but can't remember the finer details right now. Can I add more money to my ISA, as in my current year's allowance? I hav ebeen pretty slcak in sorting out banking stuff this year but need to get on and deal with it asap!

jimjames

paul5046 wrote: »

Where's the catch ?

If the recent events have taught us anything, its "if it seems to good to be true,it usually is".

I'm struggling to understand the point of them offering a 5 year fix at 5% but you can withdraw without penalty after 90 days.

Why make it 5 years fixed when everyone can leave as soon as rates improve? Maybe its my simple mind but it doesn't seem to have any logic with 5 year fix and no tie in. With a mortgage for example if you fix it for 5 years you have a penalty to leave before then?

Andy

Edit - whoops - just realised how old this one was!

MarkyMarkD

No, Woody, you can't add more money.

And jimjames, no, the product didn't make any sense at all. Newcastle were obviously having major cashflow issues at the time as they were offering best of market pricing on both bonds and ISAs. In my view, they wouldn't have made them such easy access, if they weren't desperate to hoover up lots of cash very quickly.

finder

Woodyrocks wrote: »

I ralise that this is an oldish thread but I am pretty sure that I have both the 5yr bond & ISA but can't remember the finer details right now. Can I add more money to my ISA, as in my current year's allowance? I hav ebeen pretty slcak in sorting out banking stuff this year but need to get on and deal with it asap!

I know this is also a very old thread but I have the same thought. I know some people have said you can't add new money into your ISA but I just got yesterday a letter from Newcastle BS saying that my ISA account is classed as DORMANT as it did not receive a subscription during the tax year ending 5th April 2010.

Having said that, it seems this very ISA account has accepted a very small amount from my newcastle online saver on 30th June 2010 (that was the interest paid by the online saver). That's 'new money' to me, and I am very surprised as I thought the ISA was closed and would not accept any 'new money' apart from the self-interest it generates every year; so I am now wondering whether they would accept internal transfers between the 5 year Bond and the 5 year ISA. In reality it has no extra cost to them as both pay 5% but it would save me a bit of tax per year.

I went to the branch today but the advisor was pretty unhelpful and suggested I needed to call their head office during the week. Has anybody tried to transfer money between their 5 year bond and 5 year ISA successfully?

Thanks

masonic

finder wrote: »

I know this is also a very old thread but I have the same thought. I know some people have said you can't add new money into your ISA but I just got yesterday a letter from Newcastle BS saying that my ISA account is classed as DORMANT as it did not receive a subscription during the tax year ending 5th April 2010.

Having said that, it seems this very ISA account has accepted a very small amount from my newcastle online saver on 30th June 2010 (that was the interest paid by the online saver). That's 'new money' to me, and I am very surprised as I thought the ISA was closed and would not accept any 'new money' apart from the self-interest it generates every year; so I am now wondering whether they would accept internal transfers between the 5 year Bond and the 5 year ISA. In reality it has no extra cost to them as both pay 5% but it would save me a bit of tax per year.

I went to the branch today but the advisor was pretty unhelpful and suggested I needed to call their head office during the week. Has anybody tried to transfer money between their 5 year bond and 5 year ISA successfully?

Thanks

I think you need to follow this up. The 5 year ISA was closed to new money as of 15th July 2009. If Newcastle BS have really added new subscriptions to your ISA this tax year (presumably in error) it could prevent you from using your 2010-2011 allowance elsewhere or trigger a slap on the wrist from HMRC if you've paid into another ISA this tax year.

finder

masonic wrote: »

I think you need to follow this up. The 5 year ISA was closed to new money as of 15th July 2009. If Newcastle BS have really added new subscriptions to your ISA this tax year (presumably in error) it could prevent you from using your 2010-2011 allowance elsewhere or trigger a slap on the wrist from HMRC if you've paid into another ISA this tax year.

What the letter says is that they will not accept the interest from the online saver - less than £1, but new money (that interest was credited last june but they just sent the letter yesterday) unless I call them and confirm I have not subscribed this year's ISA with another provider (in which case, they would return the subscription). As I have not, what the letter seems to imply is that they money will remain in the account once I confirm this and this is what I don't understand (unless, as you say, it is an error which seems strange too, because they should have some kind of flag in the account preventing them from adding new money into it); if they let the money stay in the account, that's classed as new money what prompted me to think i should also be able to transfer funds from Newcastle's 5% bond into Newcastle's 5% ISA. Will have to check with them next week.

Thanks

masonic

finder wrote: »

What the letter says is that they will not accept the interest from the online saver - less than £1, but new money (that interest was credited last june but they just sent the letter yesterday) unless I call them and confirm I have not subscribed this year's ISA with another provider (in which case, they would return the subscription). As I have not, what the letter seems to imply is that they money will remain in the account once I confirm this and this is what I don't understand (unless, as you say, it is an error which seems strange too, because they should have some kind of flag in the account preventing them from adding new money into it); if they let the money stay in the account, that's classed as new money what prompted me to think i should also be able to transfer funds from Newcastle's 5% bond into Newcastle's 5% ISA. Will have to check with them next week.

Thanks

It sounds as though they are making an exception for this interest payment so they don't have to go through the hassle of sending you a cheque in the post. But you won't be able to add any more funds yourself and you will be locked into opening another Newcastle BS ISA if you want to use the rest of your allowance this tax year. If you want to be able to open an ISA elsewhere this tax year, tell them you've already subscribed so that they remove the subscription.