Cancelling a new ISA within 14 days

keet83

I opened an ISA with northern rock, the 1 year 3.5% FRISA, and handed over the money and signed the forms. I was then handed forms to transfer my old ISA's however i asked to transfer them in january. the reply i got was that i could only transfer them within a certain time limit and she was unable to guarantee that the time limit would still be open when my others had matured. if i don't transfer these 2 ISA's over then they will go into a saving account therefore losing 2 years worth of ISA investment. if i withdraw early i get a penalty charge for early with drawl.

am i allowed to change my mind about this northern rock ISA and instead open a different one, preferable the first direct 3%, in the same tax year? i only opened it yesterday and have read up about a 14 day satisfactory rule. I wanted to know if this was true. i wasn't told that i only had a set time limit to transfer these old ISA's until i had handed over the money and signed all the forms.

Arthurian

Cancel the unsuitable NR ISA as quickly as possible. From Northern Rock's website http://www.northernrock.co.uk/help/savings-faqs/isas/

"> Can I cancel my Cash ISA?

If you are not happy with your choice of account within 14 days of opening it, we will help you close your Account and you will not lose your right to invest in another Cash ISA or Stocks and Shares ISA for that tax year.

If you wish to take advantage of this 14 day rule, please contact Northern Rock's registered Head Office to cancel your Account.

If you do cancel your Account the full amount of your investment, together with any interest earned in accordance with your Account details will be returned to you."

dtaylor84

keet83 wrote: »

if i don't transfer these 2 ISA's over then they will go into a saving account therefore losing 2 years worth of ISA investment. if i withdraw early i get a penalty charge for early with drawl.

Ignoring the question about cancelling the new ISA - what old ISA do you have that turns in to a savings account on maturation (rather than a variable rate ISA)? How would you then be able to transfer it to Northern Rock, in that case?

You should be able to transfer the existing ISA to a new provider (other than Northern Rock) when it matures in January, without losing the ISA status.

keet83

i contacted northern rock head office and they said to put it in writing then take it to the local bank. thanks for that advice.

dtaylor84: i have a julian hodge bank FRISA from last year, once its matured it needs transferring to another ISA within 2 weeks, whether its with them or switching to another bank. FRISA's do usually turn into a variable however JHB don't. also i can only transfer an ISA to northern rock within 30 days of their ISA become unavailable (if that makes sense) With opening the northern rock ISA i am unable to open a second in the same tax year.

dtaylor84

keet83 wrote: »

i contacted northern rock head office and they said to put it in writing then take it to the local bank. thanks for that advice.

dtaylor84: i have a julian hodge bank FRISA from last year, once its matured it needs transferring to another ISA within 2 weeks, whether its with them or switching to another bank. FRISA's do usually turn into a variable however JHB don't. also i can only transfer an ISA to northern rock within 30 days of their ISA become unavailable (if that makes sense) With opening the northern rock ISA i am unable to open a second in the same tax year.

As far as HMRC and the ISA rules are concerned, "opening" a new account with a provider to transfer in a previous year's ISA does not count towards your "one cash ISA per year" limit. The limit is on subscribing (paying new money in) to an ISA.

Even if you have paid in to an ISA, you are still allowed to transfer it and continue paying in to the new provider - but if you are transferring a current year's ISA you must transfer the full subscription from the current year (this would apply, for example, if you wanted to transfer your JH FRISA to a new provider, then later this year transfer the NR ISA as well).

keet83

I checked this out this morning with the HMRC just to make sure and they said it was perfectly fine to do that. :j
thank you for that advice, i never knew this and i dont think many other people do, no one i know anyway. i think i will be using this technique in future

aussiescall

Arthurian wrote: »

Cancel the unsuitable NR ISA as quickly as possible. From Northern Rock's website

"> Can I cancel my Cash ISA?

If you are not happy with your choice of account within 14 days of opening it, we will help you close your Account and you will not lose your right to invest in another Cash ISA or Stocks and Shares ISA for that tax year.

If you wish to take advantage of this 14 day rule, please contact Northern Rock's registered Head Office to cancel your Account.

If you do cancel your Account the full amount of your investment, together with any interest earned in accordance with your Account details will be returned to you."

I did just this recently. I transferred my Natwest Isas (1 from 2 previous years and 1 from this year) to Northern Rock.
I tried to cancel the transfer with Natwest on a Saturday but it seems they don't do Isa's on a Saturday.
I phoned Northern Rock on the Saturday to cancel who said I would have to speak to Natwest to stop the transfer.
By the time I phoned Natwest on the Monday they had transferred the money and would take it back but in a normal low rate Isa.
So I phoned Northern Rock to say I would go ahead with the transfer as it seemed futile going back to Natwest.

I then read about the 14 day cooling off period so I sent them a letter to cancel within 14 days (not close or transfer as this would have incurred a charge which I was aware of as it is a fixed rate with terms and conditions)) and they sent me a cheque.
I went to pay it into an Abbey Isa and they wouldn't accept it.
I had repeatedly asked Northern Rock whether I would still be able to invest and they said yes.
They even told the Abbey this but the Abbey wouldn't accept it.
I phoned back again and spoke to a manager who said they would review the telephone calls.
The telephone calls are immaterial as I sent a letter to cancel just as they state in their terms and conditions.
I'm now a little peturbed to say the least!