M&S Money 4% ISA

Ifts

Porcupine wrote: »

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

Just out of interest, what provider did you transfer in from?

samizdat

I have a maturing ISA that I wish to transfer to M&S, plus I want to subscribe for the coming tax year.

As was pointed out earlier in the thread, in order to avoid separate accounts being opened by M&S, one strategy is to subscribe the new money into the old ISA and then execute the transfer - i.e. wait until 6 April, deposit new money into old ISA, then transfer.

I called M&S and was told that it is acceptable to put a specific date in the box in section 3 of their transfer form that allows you to specify a notice period in days. In other words, regardless of whether there is a notice period on your old ISA, you can tick the box to say there is, and below specify the exact date on which the transfer should occur.

I'm not sure exactly how such instructions will be carried out. Is it safe, for example, to specify 7 April as the date if I know I can deposit money for same-day value into the old ISA on 6 April? Or, would M&S have already contacted my old provider and obtained a cheque for the closing balance in the maturing account some days before actually applying the funds? Seems unlikely given the fact that notice periods ought to be respected - even if they don't exist!

If I actually decide to go with M&S, I will probe further.

Baldur

samizdat wrote: »

I have a maturing ISA that I wish to transfer to M&S, plus I want to subscribe for the coming tax year.

As was pointed out earlier in the thread, in order to avoid separate accounts being opened by M&S, one strategy is to subscribe the new money into the old ISA and then execute the transfer - i.e. wait until 6 April, deposit new money into old ISA, then transfer.

I called M&S and was told that it is acceptable to put a specific date in the box in section 3 of their transfer form that allows you to specify a notice period in days. In other words, regardless of whether there is a notice period on your old ISA, you can tick the box to say there is, and below specify the exact date on which the transfer should occur.

I'm not sure exactly how such instructions will be carried out. Is it safe, for example, to specify 7 April as the date if I know I can deposit money for same-day value into the old ISA on 6 April? Or, would M&S have already contacted my old provider and obtained a cheque for the closing balance in the maturing account some days before actually applying the funds? Seems unlikely given the fact that notice periods ought to be respected - even if they don't exist!

If I actually decide to go with M&S, I will probe further.

You need to specify the date on which you wish the transfer to take place to your old provider via the ISA transfer form.

M&S have no power to obtain funds against your transfer instruction to your old provider, so cannot do so before the specified date. If your old provider fails to adhere to your instruction, it would be grounds for a formal complaint - if necessary, followed by a complaint to the Financial Ombudsman Service.

Stompa

MarkyMarkD wrote: »

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.

Perhaps, but a lot of people will just want to transfer the whole lot out should a significantly better rate become available elsewhere, so would prefer a single pot.

MarkyMarkD

Porcupine wrote: »

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

Obviously two, as one will start a significant number of days after the other.

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

Obviously one, because both cheques will be deemed to clear on the same day (and in fact will do so if they are banked the same day).

You send them transfer forms in the same envelope for a dozen different providers. How many deposits is that?

Probably a dozen.

What if some of the transfers happen to be received on the same day?

Probably they'll be aggregated.

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.

Of course the Ts & Cs don't spell out each of these. They don't need to. They state that any funds deposited on different days form different bonds.

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.

It's clear enough to me. Sorry if it isn't to you!

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.

That's your choice. You don't have to transfer in two different amounts to them at all - you can consolidate it with your existing ISA providers, if you want to.

Just because something is a limited term offer doesn't mean they have to do it the way you want.

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.

A fixed sum fee is a far more reasonable reflection of the effort of processing an early closure, I guess, and it's a deterrent which is probably the intention. And they don't want small amounts, I guess, which is why they deter them with a fixed amount (rather than percentage) fee.

Porcupine

Ifts wrote: »

Just out of interest, what provider did you transfer in from?

First Direct. Particularly disappointing since M&S and First Direct are both operated by HSBC.

DavidAC

I have only just seen this ISA. I was going to go with NationWide at 4.4% but reading the difference in early withdrawal it makes the choice difficult.

Does anyone have experience in transferring a Lloyds Fixed rate ISA to the M&S Fixed rate ISA? My Lloyds ISA reaches the end of its term in a few weeks. I do not want the money sitting in limbo between the two ISAs earning no interest.

Baldur

I'm in the process of transferring my LTSB FRISA, on maturity, to M&S, the LTSB one matures at the end of this month.

Transfer application sent to M&S at the end of last month, also a letter to LTSB instructing them to transfer on maturity - letter of acknowledgement received from M&S.

DavidAC

I have just spoken with M&S. I was told as long as they start processing the application while the issue is still open I will get that issue even if it is withdrawn before the transfer takes place, which in my case is near the end of April. I hope this is correct.

I was also told their might be a few days between Lloyds sending the funds and the funds earning interest in the M&S ISA. I guess it depends on how Lloyds send the funds.

I think Nationwide will be better in the first year, but after that who knows what will happen to interest rates. I have a large balance to transfer so the fixed early withdrawal fee from M&S is probably safer.

I guess I can still put next years ISA funds into Lloyds before the transfer takes place to M&S.

Baldur

DavidAC wrote: »

I think Nationwide will be better in the first year, but after that who knows what will happen to interest rates. I have a large balance to transfer so the fixed early withdrawal fee from M&S is probably safer.

That was my reasoning, the greater flexibility is worth more than the extra 0.4% as far as I'm concerned.