Dunfermline Isa fixed 3% - Can they really just close my ISA?

miss_sixties22

I asked some months ago about this ISA and feedback was positive. I was aware that they could close the account but (naively) based on the input on here, I didn't think they would do it, or would do it much later in the year.

I called this week to put money into my ISA only to be told it had become a closed issue and therefore I could not put anymore money into my account this year!! Naturally I am peeved as it was apparently closed at the end of May/beg June yet there was no correspondence to its customers.

Now i realise it was in the terms and conditions and, yes, I was aware of this (however, I don't think I fully understood and not once did someone on the phone point this out/explain it to me) but what i don't get is why a bank/building society would do something like that and so quickly? Surely, it's in their interest for customers to put their whole ISA investment into their bank over the year?

I have already paid £2000 odd into the account so have effectively 'lost' the other £3000 i could have put in this year as I cannot transfer and pay into another ISA (please correct me if i'm wrong).

Are banks really allowed to do this? As you can imagine, Dunfermline (like Abbey/Santandar) are struck off my list and i will be reading the fine print very carefully in the future!
Thanks.

Paul_Herring

Do Dunfermline not do any other ISA's you can put the rest of this year's money into?

There's no HMRC rules against Dunfermline (only) not allowing you to put money into another ISA they provide, since under HMRC rules they should constitute one ISA since they're with the same institution.

OK, you won't be able to move any of that money this tax year, but should allow you to max up your contributions this year.

miss_sixties22

Hi, thanks for the reply.

So are you saying that Dunfermline should allow me to move all my money to another ISA with them and therefore use up my whole allowance?

If so, that should be better than nothing!

Paul_Herring

miss_sixties22 wrote: »

Hi, thanks for the reply.

So are you saying that Dunfermline should allow me to move all my money to another ISA with them and therefore use up my whole allowance?

If so, that should be better than nothing!

No - I'm saying that they should allow you to place the rest of this years allowance in a currently open ISA account while leaving your current contributions in whatever (closed to more contributions) account they're in at the moment. Since both accounts would be with the same institution, technically they still consist of "one open ISA this tax year."

What are the exact conditions attached to the existing contributions regarding withdrawal?

miss_sixties22

Oh ok. I can withdraw money but lose 60 days of interest, which is ok, I guess. I shouldn't need access to it until the year is up anyways.

Think I will give them a ring and discuss depositing the rest of my money into another ISA with them and see what they say.

Thanks for your help - they didn't mention any of this to me on the phone!

Paul_Herring

they didn't mention any of this to me on the phone!

I wouldn't hold out getting much useful information out of the first-line CS staff.

Insist on getting an answer to "which of your accounts can I put the remainder of this years cash ISA allowance in since the other account I have with you is closed to new money?"

Demand to be escalated if the sales-weasel on the other end of the phone line declines to give you a positive answer.

.. though then again, if you're withdrawing all the money by the end of the year, does it really matter if it's in an ISA or not? You're only talking pennies of interest here.

Funkyfreddy

miss_sixties22 wrote: »

I asked some months ago about this ISA and feedback was positive. I was aware that they could close the account but (naively) based on the input on here, I didn't think they would do it, or would do it much later in the year.

I called this week to put money into my ISA only to be told it had become a closed issue and therefore I could not put anymore money into my account this year!! Naturally I am peeved as it was apparently closed at the end of May/beg June yet there was no correspondence to its customers.
[..snipity snip..]

This is the 1 year Fixed, Issue 18 @ 3% ?

From what you say you spoke to them (or called in person ?) to make payment/deposit when you were told the above ?

Do you have a saved or printed copy of the T&C's ?

First entry under T&C is "Product"..

The product may be withdrawn without notice, after this time you will no longer be able too make further deposits into your account.

OK, clear enough...

Working your way down the T&C entries you have "Availability", "Amount of initial deposit", Opening an account"" followed by "Additonal deposits"

Yes

Additional deposits only whilst account remains open, subject to maximum subscription under the ISA regulations. However, if this is your only Cash ISA for the current tax year 2010/2011, and you have not used your full ISA allowance, we will allow you to top up to the full subscription limit, even when the product becomes a closed issue.

Unless you are breaking ISA rules and contributing to more than one ISA this is, by definitaion going to be your only Cash ISA for the 2010/11 Tax year and as you haven't used all your ISA allowance up you can "top up" as they allow.

I would suggest you speak to them again suggesting they consult their own T&C's for that Issue - it isn't clear though if the "top up" after closure of the Issue to your ISA limit can be with one payment or several to your ISA allowance limit of £5,100.

Hope that helps
FF

Funkyfreddy

[Bump]

Miss Sixties - just wondering if you might have an update on what the Dunfirmline had to say ?

FF