M&S Money 4% ISA

Mee

Someone mentioned HBOS?
A word of warning about the HBOS and ISA transfers out - my experience is that are unbelievably BAD! I don't be opening a new ISA with them any time soon!

if anything this last two years should have told us is going for the highest or most attractive rate may not the best strategy in the long run.

I was lucky I got my Icesave money back (thank you GB). Having experienced Smile; Barclays; Halifax, NSandI and Kent Reliance etc, I've learned to be wary of those tempting offers.

Porcupine

That's part of the attraction of the 3 year fixed rate. You can just leave it there, and you know what you're going to get. They can't quietly wind the rate down, and you don't have to switch every year when the bonus runs out. It's just there all the time, but if you need the money you can access it. And if rates go up to 6% you can move.

On the M&S ISA I've had a letter advising of various changes to terms and conditions which take effect from 1st May. So far they've only sent a list of the changes, not the actual wording of the new Ts&Cs (which will come separately) so it's difficult to tell if there are any snags. But it says that if you don't accept the new Ts&Cs you have the right to cancel the agreement with no charge. That could be a handy getout if you have a reason to pull out after your cancellation period is up.

ETA: M&SFS is run by HSBC, not HBOS

6022tivo

Sorry if I have missed it...

I currently have 30k+ in a lloyds fixed which is due to end at the end of the month?

Looking at this 4% 3yr jobbie, looks good £100 penalty which is fine if rates increase loads..

When is the 4% applied to the balance though??? Monthly, quartly??

I guess this is important, and the only penalty is £100 if I leave early.?

Stompa

6022tivo wrote: »

When is the 4% applied to the balance though??? Monthly, quartly??

Annually.

6022tivo wrote: »

I guess this is important, and the only penalty is £100 if I leave early.?

Yes.

Baldur

6022tivo wrote: »

When is the 4% applied to the balance though??? Monthly, quartly??

See Ts & Cs:

(iii) Interest will be calculated daily on the balance of each Fixed Rate Bond you hold. Annual interest as at the anniversary of the Start Date, or the next working day if the anniversary of the Start Date is a non working day, will be credited to each Bond within 30 days following the annual anniversary. Alternatively you can instruct us on application to have interest paid out to your nominated bank or building society account.
(iv) The calculation of interest will commence on the next day following the Start Date. Interest will be calculated up to and including the date of withdrawal or the Maturity Date.

JamesU

Porcupine wrote: »

I applied to transfer an ISA and to pay in my £3600 for this year.

I've just had the certificate for the transfer through and they've opened this as two accounts, with two £100 break fees. The call centre was refusing to budge on there being two fees.

I'm escalating this to a complaint. Note that there's a 30 day window for changing your mind, so be aware of this if you have to back out.

Have read through the history and do not really understand M+S reasoning on regulations leading to two accounts. I have lost count of the number of providers that have accepted a couple of part transfers to create a final pot going forwards. Might be that interest on these only started when the full amount was received. Who knows. Better T+Cs? I have heard on the grapevine they may be introducing a weekly withdrawal amnesty from their bonds and cash ISAs during the sales.

JamesU

MarkyMarkD

The Ts & Cs seem pretty evident to me.

Every deposit that you make is a separate fixed rate bond for a separate 1, 2 or 3 year period.

Every bond is subject to their early closure fees.

There is nothing to stop you transferring all your funds into a variable rate ISA with M&S, and THEN transferring to a fixed rate, if you want it all in one account with one penalty.

Whilst you may have lost count of the number of provider who add together various deposits into one account, hardly any of them charge a fixed lump sum penalty - most charge a percentage, so it's academic if they combine it or not.

M&S do not allow partial withdrawals, so for many people it will be more useful to have the money in different pots so that, if necessary, they need only incur withdraw part.

Porcupine

MarkyMarkD wrote: »

The Ts & Cs seem pretty evident to me.

Every deposit that you make is a separate fixed rate bond for a separate 1, 2 or 3 year period.

Every bond is subject to their early closure fees.

The crux of the matter is... you send them a cheque and a transfer form in one envelope. Is that one deposit or two?

What happens if you send two cheques and they take slightly different times to clear. Is that one deposit or two?

You send them transfer forms in the same envelope for a dozen different providers. How many deposits is that?
What if some of the transfers happen to be received on the same day?

Can you quote chapter and verse of the Ts&Cs that spells this out? These things weren't well specified in the Ts&Cs as they were in December (they may have changed them for new applicants). But they make a big difference.

I have no objection if their position was stated in clear English (as it may be now) but for the potential differences to be hundreds of pounds on the interpretation of their wording is sharp practice IMHO.

There is nothing to stop you transferring all your funds into a variable rate ISA with M&S, and THEN transferring to a fixed rate, if you want it all in one account with one penalty.

That's almost unworkable. Companies pull offers like this on a regular basis. A transfer takes a month. You have no idea if the fixed rate deal will still be available at the end of the month period. If it isn't, your money is stuck in a poorly-paying instant access ISA and you need to waste another month's interest transferring it out.

M&S do not allow partial withdrawals, so for many people it will be more useful to have the money in different pots so that, if necessary, they need only incur withdraw part.

Yes, but a £100 fee on £3600 is a steep withdrawal penalty (and the size of this year's pot is fixed to £3600/5100). Set against the £36pa extra you'd make in a 4% fixed rate account over a 3% instant access, you'd have to be fairly sure you weren't going to withdraw to make it worthwhile.

gwapenut

Porcupine wrote: »

A transfer takes a month. You have no idea if the fixed rate deal will still be available at the end of the month period. If it isn't, your money is stuck in a poorly-paying instant access ISA and you need to waste another month's interest transferring it out.

My understanding is that the fixed rate is reserved when they receiver your transfer request, even if it then takes a further 30 days to complete and is pulled in the meantime.

Is this wrong? Hope not, otherwise I've given bad advice in another thread, but I was pretty sure I'd checked this verbally ...

Porcupine

I think that's right, though the offer is still open so nobody's tested it.

Let's say you have two transfers to do:

You can do both transfers into the Fixed Rate account. You should get the current rate, but they'll end up in two 4% bonds with two £100 withdrawal penalties.

Or you can transfer into the instant access ISA with the hope of switching into the Fixed Rate bond when both transfers have arrived. Here you take a risk, because you haven't told M&S to open a fixed rate account yet. They might decide to withdraw the 4% and replace it with something uncompetitive in the time between you applying for the instant access ISA and the transfers arriving. In which case you're stuck in a mediocre instant ISA with your only options being an unattractive fixed rate or risk another month's loss of interest as you transfer out.

My transfer in did take a month, so these aren't entirely hypothetical risks.