Lloyds Cash ISA trick

Markie11

This is a FYI thread.

On Saturday I went into a Lloyds bank branch to close & withdraw just over £11k from a cash ISA. When the advisor drew up the final amount including interest from April, I was shocked to find out the low amount of interest to be paid up (just over £50). I was in a hurry as I needed to quickly move the money to an account with another bank, so I just thought ok do what you need to do, pay me the money and I'll query the interest later.

So yesterday I went into the bank again (a different branch) and spoke to a lovely lady, who I must say acted very professionally and dealt with my query as I would have expected. Basically I was told that for whatever reason the cash ISA reverts back to a 1% interest rate if not renewed or confirmed at the turn of the financial year. I found this difficult to comprehend because I actually had a meeting with an advisor at the bank late March to discuss finances and I setup a transfer of £2.5k into the ISA to take place on the 6th April.

So basically I was paid interest of £50 when it should been £134. Yesterday I walked out of the bank with £84 cash in my pocket, interest that I was due but wouldn't have received if I wasn't so vigilant.

I would stress to anybody else who has a cash ISA with lloyds to check the current interest rate is correct.

How many people walk away not realising that they're missing out on interest due to them while Lloyds continue to pick up the huge bonuses on our cash.

Newly_retired

You are quite right that we need to be vigilant, but that goes for any bank, not just LloydsTSB. Many accounts drop their interest rates and if you don't keep checking it is easy to find you have money in a low interest account.

opinions4u

Basically I was told that for whatever reason the cash ISA reverts back to a 1% interest rate

As they told you when the account was opened.

As is clear on their web site and clear in the T&Cs.

dunstonh

When the advisor drew up the final amount including interest from April,

Things must be bad for Lloyds if they are using advisers to do basic clerical jobs

Basically I was told that for whatever reason the cash ISA reverts back to a 1% interest rate if not renewed or confirmed at the turn of the financial year.

That is very often the case nowadays. The accounts with a 1 year bonus rate are very common at the moment.

I found this difficult to comprehend because I actually had a meeting with an advisor at the bank late March to discuss finances and I setup a transfer of £2.5k into the ISA to take place on the 6th April.

Probably as the bonus rate applies from the date the account is opened. Not the date of the last contribution made into it.

So basically I was paid interest of £50 when it should been £134. Yesterday I walked out of the bank with £84 cash in my pocket, interest that I was due but wouldn't have received if I wasn't so vigilant.

Was that a goodwill payment or correction of an error? It would suggest goodwill as if it was correction of an error, it would have taken longer to sort.

How many people walk away not realising that they're missing out on interest due to them while Lloyds continue to pick up the huge bonuses on our cash.

Only those that choose to. They publish their interest rates and they publish their terms. It is up to you to decide if you want to keep on eye on the rates and terms you agree to.

Markie11

Thanks for the recent posts.

All I'm trying to do here is be help others not be shot down over slight misunderstandings etc. I agree their terms and conditions say this.

You're forgetting one point, I spoke to an advisor in March about finances in general. Here we discussed the best places to put money, one being 'put more into the ISA which will pay the highest interest rate'. As a customer I take from this statement that ok let's do that, so on the 6th April I paid this money in. I also understood that I will be receiving the best interest rate available, not defaulting back to 1%.

Markie11

Quote:
So basically I was paid interest of £50 when it should been £134. Yesterday I walked out of the bank with £84 cash in my pocket, interest that I was due but wouldn't have received if I wasn't so vigilant.
Was that a goodwill payment or correction of an error? It would suggest goodwill as if it was correction of an error, it would have taken longer to sort.

This amount was the difference between the interest I was paid initially and what I should have been paid. It was obvious to them that I made an agreed contribution at the beginning of the year as advised I would continue on the new updated rate of 2.65%.

It took about 40 minutes to sort out over the phone between the person in the bank to somebody elsewhere.

Quote:
How many people walk away not realising that they're missing out on interest due to them while Lloyds continue to pick up the huge bonuses on our cash.
Only those that choose to. They publish their interest rates and they publish their terms. It is up to you to decide if you want to keep on eye on the rates and terms you agree to.

I believe this is very harsh. Some people don't have the time and some people are not as financially astute. I don't agree with the bank nor do I understand why the FSA allow it to happen.

opinions4u

Should the FSA stop banks offering accounts with variable interest rates and bonuses?

Some people don't have the time

It takes about 15 seconds to find the information.

Some people can't be bothered. Everybody has the time.

atush

Unlike many others, I feel you were asking for the best interest rate on your money going forwards at your March meeting with the bank advisor. Who didn't follow up on it as you had asked. So agree that you should ahve had the money and I am glad you are reminding others to be vigilant. Also surprised the second advisor sorted it so easily for you w/o digging their heels in.

Never a bad thing really to remain vigilant.

Markie11

opinions4u wrote: »

Should the FSA stop banks offering accounts with variable interest rates and bonuses?

It takes about 15 seconds to find the information.

Some people can't be bothered. Everybody has the time.

For somebody who knows what they're doing and has a financial head on their shoulders. For some others who don't then it's always good to be able to help them out with threads like this.

gadgetmind

opinions4u wrote: »

Should the FSA stop banks offering accounts with variable interest rates and bonuses?

No.

You need to do your research, choose an account, and when you open it, note that date on which you need to review it. Put this both in a spreadsheet that stores details of all of your savings and investments and also in your diary.

If you have the basic smarts to do the above, you'll be able to enjoy the higher interest rates than can be paid as a result of cross subsidies from those without basic smarts.

Harsh but true.

fairleads

opinions4u wrote: »

Should the FSA stop banks offering accounts with variable interest rates and bonuses?

It takes about 15 seconds to find the information.

Some people can't be bothered. Everybody has the time.

Markie11, good on you and ignore the above comment. Its obviously from someone with a vested interest in the financial services industry. The forum abounds with them.