HBOS ISA Direct Reward is a trick. If you transfer out you lose 6 months' interest

Tommaso46

After about an hour looking into it, and looking for the precise Terms and Conditions that apply, I've found out that when you open an HBOS Direct Reward ISA, if you transfer out to another provider (for instance when they drop their rate after one year) you automatically lose 180 days' interest!

Which makes the whole thing completely pointless.

Naturally they hide this information away where it's very hard to get hold of.

I don't often get time to investigate these things. I had an hour free today, OK?.

So Martin, please stop highlighing the HBOS 3% ISA as a good deal. It's an AWFUL deal.

glider3560

No, no, no, no, no!!

You are looking at the Fixed Rate ISA Saver. There is no loss of interest when transferring the ISA Direct Reward.

Tommaso46

No no yourself. If you open an HBOS ISA Direct Reward and keep it for a year so that you can collect the interest (which is paid yearly) it is then AUTOMATICALLY converted into a Fixed Rate ISA Saver, whereupon the conditions that apply are those for the Fixed Rate ISA Saver.

So you're ****ed if you open one.

As I said, they keep this info well hidden.

glider3560

Tommaso46 wrote: »

No no yourself. If you open an HBOS ISA Direct Reward and keep it for a year so that you can collect the interest (which is paid yearly) it is then AUTOMATICALLY converted into a Fixed Rate ISA Saver, whereupon the conditions that apply are those for the Fixed Rate ISA Saver.

It is not. It becomes an ISA Saver, which is variable rate and instant access.

Tommaso46 wrote: »

As I said, they keep this info well hidden.

Care to point out where? I've read the whole T&Cs with a fine tooth-comb and even have a copy on my desk here. Please tell me where and I'll look it up.

Tommaso46

glider3560 wrote: »

Please tell me where and I'll look it up.

Here are the T&C that apply:

http://www.halifax.co.uk/savings/forms/generic_sav_app/forms/pdfs/1_336202-9.pdf

You'll need a VERY fine-toothed comb. Try doing a word search for terms like "transfer" and "out" and "Other provider" etc.

glider3560

Tommaso46 wrote: »

Here are the T&C that apply:

http://www.halifax.co.uk/savings/forms/generic_sav_app/forms/pdfs/1_336202-9.pdf

You'll need a VERY fine-toothed comb. Try doing a word search for terms like "transfer" and "out" and "Other provider" etc.

Can you tell me which page and paragraph specifically says this

Tommaso46

glider3560 wrote: »

Can you tell me which page and paragraph specifically says this

Page 25 "If you close early or transfer to another ISA provider you will lose an amount equal to 180 days interest, calculated at the rate at which interest is paid on your account."

Now do you believe me?

glider3560

I refer you to halfway down the second column on page 24, which says "The following terms apply to the fixed rate Halifax ISA Saver". This applies until "The following terms apply to Halifax ISA Direct Reward" on page 25.

Tommaso46

glider3560 wrote: »

I refer you to halfway down the second column on page 24, which says "The following terms apply to the fixed rate Halifax ISA Saver". This applies until "The following terms apply to Halifax ISA Direct Reward" on page 25.

Yes but a Halifax ISA Direct Reward automatically becomes a Halifax ISA Saver after one year.

glider3560

Tommaso46 wrote: »

Yes but a Halifax ISA Direct Reward automatically becomes a Halifax ISA Saver after one year.

It becomes a variable rate Halifax ISA Saver. The conditions on page 24/25 refer to a fixed rate Halifax ISA Saver.

bobthedambuilder

Tommaso46 wrote: »

No no yourself. If you open an HBOS ISA Direct Reward and keep it for a year so that you can collect the interest (which is paid yearly) it is then AUTOMATICALLY converted into a Fixed Rate ISA Saver, whereupon the conditions that apply are those for the Fixed Rate ISA Saver.

I've just opened one of these, :eek: so I hurriedly checked the Halifax website. Pasted below is the statement in the Summary Box of the Halifax ISA Direct Reward account regarding the action after the 12 month period that the account runs:

"after the 12 month reward period, the ISA Saver Direct variable interest rate and conditions apply." (My underlining)

There is then a link to the T&C for the ISA Saver Direct variable interest rate account. I can see no mention in those T&C's of a 180 day penalty.

The pdf document that opens from the link also contains the T&C's for the Fixed Rate ISA Saver, which does have a 180 day penalty, but this is not the account that the Direct Reward account reverts to.

So unless I'm mistaken you don't have to worry about loss of interest. Even if you do, surely you'd only be losing 6 months at 0.1% or so per annum, so vanishingly small anyway!:)