MSE News: Halifax to pay Isa transfer interest from day one

rb10

TattyBear wrote: »

I opened a 2 year fixed at 3.5% with the Halifax last April, and stuck this tax year's (2010/11) contribution in it. ie new money.

How? Their fixed rate accounts don't allow additional deposits.

TattyBear

rb10 wrote: »

How? Their fixed rate accounts don't allow additional deposits.

Eh :question:

rb10

TattyBear wrote: »

Eh :question:

Sorry ... misread your post, and thought you said that you opened one last April (i.e. 2009), then added this year's allowance this April (i.e. 2010).

Please ignore me

TattyBear

rb10 wrote: »

Please ignore me

Will do!

The_Pedant

I only just saw this offer on their site today.
Given how slow *some* providers are in releasing funds, I was pondering using Halifax as an intermediate step in getting my money out of an ISA with one of the slow-pokes ... before moving it somewhere suitable (in due course). At least it means not losing a month's interest as the money gets stuck in transit.

Consumerist

The_Pedant wrote: »

At least it means not losing a month's interest as the money gets stuck in transit.

Only slightly off-topic but new ISA guidelines come into effect from 01 Jan 2011 which should eliminate the loss of interest.

The revised Guidelines implement the following key changes which come into effect on 1 January 2011:

• The maximum time taken for a typical Cash ISA to Cash ISA transfer is cut from 23 to 15 business days
• The new provider will backdate interest to the first day where interest no longer accrues on the funds being transferred from the customer’s existing Cash ISA
• The new provider will start paying the new interest rate from day 16 at the latest, regardless of whether the transfer has completed within the standard 15 business day timeline (pended cases excepted)

It was my understanding that the OFT report required a maximum of two days loss of interest but the new guidlines seem to imply no loss at all.

The_Pedant

Thanks for that. I was aware there were some guidelines being drawn up to reduce the loss of interest, but was not sure when they were coming into effect or whether there was any obligation for the banks to follow those 'guidelines'.

I guess there would be an expectation for the BBA members to follow the best practice.

Reassuring to know.

rb10

Consumerist wrote: »

Only slightly off-topic but new ISA guidelines come into effect from 01 Jan 2011 which should eliminate the loss of interest.
It was my understanding that the OFT report required a maximum of two days loss of interest but the new guidlines seem to imply no loss at all.

Loss of interest will still occur in many situations, e.g. if I have a fixed rate ISA, and the bank doesn't get around to sending the cheque for two weeks. I'll then only be earning interest at 0.1%-ish for those two weeks (unless I am transferring to Halifax or Nationwide).

Consumerist

rb10 wrote: »

Loss of interest will still occur in many situations, . . .

See what you mean. Term ISAs could still be a problem but at least you shouldn't be stuck at the 0.1% for more than the 15 days.

In fact, if I understand the new guidelines correctly, after 15 days the ISA could be earning interest from both providers at the same time. Have I understood this correctly ?

rb10

Consumerist wrote: »

In fact, if I understand the new guidelines correctly, after 15 days the ISA could be earning interest from both providers at the same time. Have I understood this correctly ?

Yes, that is my reading of it too.

Remember that in this instance, the term 'days' always means 'business days', so we are actually talking about three weeks.