Very confused about ISA bonus'

jbolhoven

I opened an ISA account in July 2010 which had a 2.35% interest rate, including a 1.35% 12-month bonus. Some interest was paid on 31 March 2011 (less than 1% by the looks of it) but I have been told that I have to wait until 31 March 2012 for the rest to be paid. Is this right - I assumed the bonus rate would be paid on the anniversary of the account opening (i.e. the end of the bonus period)? What if I transfer my ISA in the meantime (it's no longer competitive), does that mean I am no longer entitled to the remaining interest? I feel a bit conned!

10_66

jbolhoven wrote: »

I opened an ISA account in July 2010 which had a 2.35% interest rate, including a 1.35% 12-month bonus. Some interest was paid on 31 March 2011 (less than 1% by the looks of it) but I have been told that I have to wait until 31 March 2012 for the rest to be paid. Is this right - I assumed the bonus rate would be paid on the anniversary of the account opening (i.e. the end of the bonus period)? What if I transfer my ISA in the meantime (it's no longer competitive), does that mean I am no longer entitled to the remaining interest? I feel a bit conned!

Which ISA is it? Some pay the bonus interest at different times, some you need to keep a minimum of £1 in the account to qualify for the bonus, so if that's the case with yours and you wanted to transfer out, you'd be best to keep the £1 in the account and transfer the rest out so that you'd still qualify for the bonus. It's difficult to say without knowing which ISA you have, and its terms & conditions.

jbolhoven

It's a Lloyds TSB Cash ISA Saver. The more I look into this, I think they will advise me to keep a minimum of £1 in the account to qualify, but their T&C's are not that clear.

10_66

jbolhoven wrote: »

It's a Lloyds TSB Cash ISA Saver. The more I look into this, I think they will advise me to keep a minimum of £1 in the account to qualify, but their T&C's are not that clear.

Looking at their current t&c's, it only states that interest is paid on 31 March. There's nothing in the general overview of the account to say that you have to leave a minimum amount in for a certain length of time to benefit from the bonus. I assume, therefore, that if you transferred the full amount out (so closing the account), that you would be paid the full amount of interest due to you. However, without knowing what the terms and condtions are of the version that you took out, it's impossible to say. You're best checking with their ISA department if you say you think the t&c's aren't clear.

Saints2011

This account was 2.35% which included the 1.35% for 12months after the 12 months = 1.00% all interest on this ISA is paid on the 31st March, interest calculated daily no min has to be left in account.

G_M

KirbyBirch wrote: »

This account was 2.35% which included the 1.35% for 12months after the 12 months = 1.00% all interest on this ISA is paid on the 31st March, interest calculated daily no min has to be left in account.

Is that meant to read "100%" ?

10_66

G_M wrote: »

Is that meant to read "100%" ?

I think what KirbyBirch meant by that is that after the 12 months the bonus drops off and the interest rate falls to 1% (bonus of 1.35% + standard rate of 1% = 2.35%).

IronWolf

Transfer the ISA to another provider and close the account. They will then pay you all interest outstanding before closing

agsnu

IronWolf is right - but I'm surprised it was "less than 1%" you received in March. I'd have expected it to be approximately (average balance in the account from july - march) * 2.35% * 8 / 12 = approx 1.5% of your average balance.