Natwest e-isa

stardust09

So, could you close your Natwest e-isa so you're not an existing e-isa customer any more, transfer the funds out then apply for a new Natwest e-isa at the better rate? At the moment, I'm in the process of transferring my Natwest e-isa to Nationwide but would happily send it back again for an extra 0.4% interest per year!

rb10

stardust09 wrote: »

So, could you close your Natwest e-isa so you're not an existing e-isa customer any more, transfer the funds out then apply for a new Natwest e-isa at the better rate? At the moment, I'm in the process of transferring my Natwest e-isa to Nationwide but would happily send it back again for an extra 0.4% interest per year!

Whilst your plan would probably work, remember that Natwest pay a low variable rate for up to six weeks, before the higher rate kicks in.

hebron

EdGasket wrote: »

I opened an e-ISA before May 2009 and am still getting a healthy rate; if I didn't I would move it elsewhere. Don't know why NatWest decided to keep that rate 'high' while dropping the rate on most other accounts for existing customers; still I'm not complaining as it's convenient and instant access.

I have the same account and I have just received a letter today telling me that the rate is dropping to 3.01 AER and 2.97 gross.

lisyloo

remember that Natwest pay a low variable rate for up to six weeks, before the higher rate kicks in.

It's not that low, so for example it might be 2.5% rather than 3.5% (depending on which tier you're on obviously).
It's not like one of the 0.01% accounts.
Yes it's less, but it's still not a terrible rate.
Personally I wouldn't call it low - but hey who cares about the words, look at the numbers.

stardust09

Or, if someone is worried about 6 weeks loss of 1% interest, you could transfer money out to a higher paying e-isa, close e-isa, open a new e-isa with a small amount of money, wait for bonus rate to kick in after 6 weeks then transfer money back in!

EdGasket

hebron wrote: »

I have the same account and I have just received a letter today telling me that the rate is dropping to 3.01 AER and 2.97 gross.

Yes I got one too; they must have read my post and figured they were being too generous. The new rate for me is 2.75% as I'm under £25K. This is still not too bad compared to some other options but who wants to invest for a return significantly less than inflation? I think I will move it into stocks and shares and take my chances with an Index-linked gilt ETF.

MikeMcr

stardust09 wrote: »

Or, if someone is worried about 6 weeks loss of 1% interest, you could transfer money out to a higher paying e-isa, close e-isa, open a new e-isa with a small amount of money, wait for bonus rate to kick in after 6 weeks then transfer money back in!

Why do you have to open the new e-ISA with a "small amount of money". Surely you can open with a zero balance and transfer in a month later? That is what I am in the process of doing.

I thought the bonus kicks in the month after opening the account? It still shows up on online banking with a zero balance so isn't that classed as open?

sly_dog_jonah

stardust09 wrote: »

So, could you close your Natwest e-isa so you're not an existing e-isa customer any more, transfer the funds out then apply for a new Natwest e-isa at the better rate? At the moment, I'm in the process of transferring my Natwest e-isa to Nationwide but would happily send it back again for an extra 0.4% interest per year!

My better half has the old e-ISA that is just about to drop the interest rate. We're going to apply for the Natwest Cash ISA online and transfer the e-ISA into it (closing it), then a couple of days later reapply for the 'new' e-ISA and transfer back.

Bit of a faff but worth it for the extra £50 interest at 3.25% vs 2.75%.

torchie

My understanding of Ts &Cs (not specifically NatWest) is that you do not necessarily need to be a customer at the time you are requesting the "new" account for them to be able to decline your application - in fact they can probably decline any application - that is their prerogative - they are not obliged to take your investment and do not have to give a reason.

I asked the question about transferring out and transferring back in and received the following answer:

Dear Mr xxxxx

Regrettably if you move the ISA away and open a new ISA with us and transfer money back in, you will not be eligible for the higher rate that is offered to new customers.

Kind regards

Miss xxxxxxxxxxxx

Customer Relations

sly_dog_jonah

As was pointed out previously, the current eISA is available to existing customers providing they don't current have an eISA. Therefore closing an existing eISA should satisfy this requirement before applying.