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New Direct ISA with A&L

A&L are paying 5.40% on £1+ with online transactions and instant access. You can transfer funds in and the only catch I can see is that you have to pay £25 to transfer funds out. This could be dodgy if they decide to reduce their rates. Is this a sprat to catch a mackerel? Maybe, but they don't give any guarantees about changing rates.
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Comments

  • Reaper
    Reaper Posts: 7,343 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    Well spotted on the £25 fee. I don't trust companies that do that. I feel they are the ones most likely to do brief headline grabbing offers then drop the rates later. Wheras a company that makes it easy to transfer out is more likely to stay competitive.
  • lipidicman
    lipidicman Posts: 2,598 Forumite
    I am very wary of tie-ins like this. A fixed fee like this is particularly hard on someone with a small amount in the account - as it will be larger compared to the interest earned. If you have £18k (around the max in a mini cash isa since it started) then the years interest would be about £950 and £25 equates to around a 0.15% rate drop. If you have only £500 it would wipe out your gains entirely!

    So....maybe this is OK if you transfer in a large balance
  • deemy2004
    deemy2004 Posts: 6,201 Forumite
    The £25 fee is just another example of why A&L should be avoided. Now try and transfer out and see the pain you will have to go through from daft questions such as Why do you want to transfer out, to losing your paperwork and dragging the transfer-out process out over 3 or more months when it should not take more than 2 weeks.

    No ............ Avoid A&L ISA accounts !
  • blinko
    blinko Posts: 2,519 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    The £25 fee is just another example of why A&L should be avoided. Now try and transfer out and see the pain you will have to go through from daft questions such as Why do you want to transfer out, to losing your paperwork and dragging the transfer-out process out over 3 or more months when it should not take more than 2 weeks.

    No ............ Avoid A&L ISA accounts !
    i agree £25 is harsh and theres nothing stopping them from dropping there rate and you will be

    either stuck with a low rate
    or
    forced to pay £25

    i agree with banks loosing paperwork two it seems all too common these days especially when it suits them
  • hansi wrote:
    A&L are paying 5.40% on £1+ with online transactions and instant access. You can transfer funds in and the only catch I can see is that you have to pay £25 to transfer funds out.
    Hmm - I couldn't see any reference to this initially; from Direct ISA User Guide
    Can I withdraw money from my Direct ISA?
    You can withdraw money (see paying in and making withdrawals) at any time and without penalty. Withdrawals are made by transfer to your nominated current account.
    This doesn't make any mention of a fee, and to me, seems to indicate that there will be no fee.

    However on the first set of T&C's (the post below is about the second set) mention:
    5.5 If You wish to transfer the funds in Your Account to an ISA at another financial institution, an exit charge, as detailed in Our Tariff for Additional Services, may be payable. This will be withdrawn from the total balance on the Account, unless You have already made payment through an alternative method that We have agreed.
    (From the tone of the other posts in this thread, I assume this is probably MBNA's definition of may charge.) From their Tariff:
    Transfer of variable rate/fixed rate ISA to another institution............................................... £25
    Anyway, I have my own problem with setting this up; see Transferring ISA T&C's/"2nd account" thread.
    Conjugating the verb 'to be":
    -o I am humble -o You are attention seeking -o She is Nadine Dorries
  • hansi
    hansi Posts: 3,001 Forumite
    Part of the Furniture 1,000 Posts
    Can't be clearer than this!

    https://www.alliance-leicester.co.uk
    SavingsDirect
    This sheet sets out the tariff for additional services. If you would like further information
    please contact SavingsDirect on 08703 333 444, calls are charged at national rate.
    Textphone 0845 300 0073, textphone calls charged at local rate.
    Written details of interest paid ................................................................................. £10 per year
    Stopping a cheque (a cheque will not normally be
    stopped unless it has been lost or stolen) .......................................................... £15 per cheque
    Reference .............................................................................................. £25 per enquiry (inc VAT)
    Copy of paid cheque ............................................................................................. £10 per cheque
    Detailed calculation of interest ................................................................................ £15 per year
    Detailed statement of transactions and interest ..................................................... £15 per year
    Request for duplicate Section 352 certificate ................................................. £10 per certificate
    Miscellaneous calculation (by negotiation but subject to
    a minimum charge, please ask for details) ...................................... minimum £10 per enquiry
    CHAPS payments ............................................................................................. £30 per transaction
    Transfer of variable rate/fixed rate ISA to another institution............................................... £25
    Audit certificate ................................................................................................. £25 per certificate
    Charges correct as at 14 January 2005. Charges are subject to variation. Alliance & Leicester plc, SavingsDirect, PO Box 478, Narborough, Leicester LE19 0BR.
    SA8409/MT 01/05
    Tariff for
    Additional Services
    SAVINGS
  • hansi wrote:
    Can't be clearer than this!
    [tariff snipped]
    Not that clear. The thing that muddies it is the fact that the T&C's say they may charge (they may not, but see MBNA CC threads about their BT fees,) and the front page to the ISA's says you can withdraw at any time and without penalty.
    Conjugating the verb 'to be":
    -o I am humble -o You are attention seeking -o She is Nadine Dorries
  • hansi
    hansi Posts: 3,001 Forumite
    Part of the Furniture 1,000 Posts
    To me, it's very clear! They specifically state that if you transfer out, it will cost you £25. It's there in black and white.
  • hansi
    hansi Posts: 3,001 Forumite
    Part of the Furniture 1,000 Posts
    Further to the above, there is obviosly no charge for paying in or withdrawing. I doubt if they would have any customers if they started that!
  • I think I know where my misunderstanding stems from.

    Withdrawing doesn't appear to be the same as thing as transferring out (I assumed until just now that it was.)

    Is this right?

    If so, is this what they're hoping most other people won't realise?
    Conjugating the verb 'to be":
    -o I am humble -o You are attention seeking -o She is Nadine Dorries
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