First Direct to launch 6.25% mini cash ISA

Milarky

Reaper,

Thank you.

My understanding was that:

a 'current' year's subscription [i.e. one made this year to a different ISA] cannot be transferred as you are only meant to subscribe to one ISA each year. I assumed you had to wait until a tax year ends to transfer or else that transfer ends up being money which has been paid into two separate ISAs in the same year. Obviously if you treat a 'transfer' as separate from a 'subscription' you could in effect 'subscribe' the same pot of £3,000 into two ISAs - eg pay £2,000 into ISA 'A' [a 'subscription'] then transfer £1,500 into ISA 'B' [a 'transfer'] then further subcribe £1,000 into ISA 'A'. But you couldn't transfer £2,000 from 'A' to 'B' and then further subscribe £1,000 to 'B' could you?

Does anyone know whether being able to transfer a current year's subscription is restricted to the 'whole of subscription' in any case? [We've established that splitting previous years' subscriptions is permitted]

Back to First Direct. I had assumed that 'CAT' standard meant they would have to treat transfers like subscriptions and where they have to accept £3,000 a year to be CAT standard they would have to accept any valid transfer without restriction - but I suspect they have the right to restrict acceptance of transfers and that 'transfers' don't have the same 'rights' as 'new money' does under the Inland Revenue rules.

Milarky

I've been on to First Direct today about applying for this account via a transfer.

But because the online application form is only set up for opening an account directly, they ended up saying they would send an application pack by post for me to take back to my other provider and then return to them. Anyone else trying to open this account by transfer ought to contact FD and they will probably be sent packs also.

Yes, it appears 'same year' transfers are generally allowed. [BTW Nationwide ISA Bond holders do not have to give any notice [normally 60 days on withdrawals] on transfers]

FD say only the interest added this year [if the transfer were to cause interest to be paid - which it won't if you have over £3,000 in the other account and the account would remain open still] can be included with the transfer. They also say past year transfers are not allowed [which we must assume that they are allowed to state]

Hope that helps a bit.

dawny10

Just to make sure I have this straight....I could transfer my £3,000 03/04 ISA which is with Nationwide to First Direct, even though I have paid into an Abbey ISA this tax year (04/05)?

Also, could I transfer out of First Direct after October 6 2005 to elsewhere, even if I had contributed to another 05/06 ISA? 6.25% for 7 months and then moving it to one of the 5%+ ISAs would be good!

Any help gratefully received, I think I have almost got my head around ISAs, but not quite!

isasmurf

Milarky wrote:

Does anyone know whether being able to transfer a current year's subscription is restricted to the 'whole of subscription' in any case? [We've established that splitting previous years' subscriptions is permitted]

Back to First Direct. I had assumed that 'CAT' standard meant they would have to treat transfers like subscriptions and where they have to accept £3,000 a year to be CAT standard they would have to accept any valid transfer without restriction - but I suspect they have the right to restrict acceptance of transfers and that 'transfers' don't have the same 'rights' as 'new money' does under the Inland Revenue rules.

The rules on transfers are that current year's subscriptions must be transferred in full. You cannot split up current year's subscriptions, otherwise you would effectively be 'subscribing' to 2 Cash ISAs which isn't allowed. When you transfer current year's subscriptions you are effectively transferring your right to invest in 1 Cash ISA in the year to the new provider.

On CAT standards, I don't think there are any rules on transfers, other then they cannot charge a fee.

Milarky wrote:

FD say only the interest added this year [if the transfer were to cause interest to be paid - which it won't if you have over £3,000 in the other account and the account would remain open still] can be included with the transfer. They also say past year transfers are not allowed [which we must assume that they are allowed to state

There just had to be catch somewhere. I knew I should have transferred my previous years ISA to this years. I don't want to transfer my current subscriptions out of there.

westernpromise

Milarky wrote:

FD say only the interest added this year [if the transfer were to cause interest to be paid - which it won't if you have over £3,000 in the other account and the account would remain open still] can be included with the transfer. They also say past year transfers are not allowed [which we must assume that they are allowed to state]

Now I'm really confused.

They'll let you transfer in £3,000 this year and £3,000 next, but not your whole existing ISA balance held elsewhere? And if you want to transfer out again after the 6.25% bit expires, they'll withhold all the interest?

simonkirkland

Hi,

I phoned first direct last night to ask about there new e-isa and at first they didn't know much. They were telling me to close my previous years isa and open a new one with them and pay in the cash. I told them this wasn't the way to transfer an isa as I can't transfer my previous interest (isa has £3500 in and the max you can pay in is £3000). They said, "sorry sir I asked a collegue and thats what they told me but I think I remember on my training that you can trasfer, I'll just double check". They came back and said, you can transfer but you can't apply online and they are sending me a couple of forms.

I've not read all the terms closly yet but has anyone found anything that stops us transfering (free) to or from first direct? or anything that means if we transfer away in october they don't pay the interest?

Thanks

Simon

Milarky

simonkirkland wrote:

I've not read all the terms closly yet but has anyone found anything that stops us transfering (free) to or from first direct? or anything that means if we transfer away in october they don't pay the interest?

[Thanks to isasmurf for excellent clarification BTW]

Simon, Westernpormise,

They will not impose any penalties [charges etc] on transfers out whatsoever as this is a 'CAT' standard ISA. Many ISAs aren't but this one is. So you may safely open one with the intention of moving it to a better rate after the seven months - no catches.

dawny10 wrote:

Just to make sure I have this straight....I could transfer my £3,000 03/04 ISA which is with Nationwide to First Direct, even though I have paid into an Abbey ISA this tax year (04/05)?

No, the year you can transfer is this years [assuming you have already made it to someone else] which is 2004-05. That will be the Abbey cash in your case. And as isasmurf said about transfers that will be the full amount too.

kinesin_2

I notice the new 6.25% FD Isa has a no-transfer from other FD isa's, could I set up a IF isa, and bounce the money that way, or it's not worth it?

sly_dog_jonah

Damn this is all confusing!

I have a 2004/5 MiniISA with M&S Money with the maximum subscription for this year, plus 4 year's previous subscriptions which were transferred across to M&S in May.

So can I transfer the whole of this ISA across to First Direct or only this year's 3k?

Reaper

sly_dog_jonah, you can only transfer £3k of it.

kinesin, I don't understand your plan. "No-transfer" means you can't transfer it!