Virgin Easy Access Cash E-ISA 2.85%

solorize

Hi,

I am thinking of opening a new e-ISA with Virgin : Virgin Easy Access Cash E-ISA 2.85%, and transferring my monies from my current e-ISA held with Nationwide.

My current Nationwide e-ISA bonus rate expires soon, on the 31st October 2012. But I have a couple of questions I would like to have answered before starting the process.

If someone could answer the following questions it would be much appreciated.

1.
The rate of interest for the virgin e-ISA is 2.85% and has no term associated to it. Does this mean that as long as I hold the e-ISA account with them this rate will not change / expire?

If this is the case I can keep my money in the e-ISA until there is a better offer in the future, either with virgin or another at a higher rate.

2.
When should I start proceedings to take out the new e-ISA with Virgin? Do I need to wait until after my current Nationwide one expires, or should set up the new Virgin account now and then transfer my monies once it’s been set up ?

Which then kind of leads onto my last question which is..

3.
On the Virgin/Northern Rock, transfer Authority Form, there is a section which asks me to pick one of the two following options (I’ve denoted them as ‘A’ and ‘B’ below):

Transfer authority
I authorise my existing ISA provider to transfer the ISA to Northern Rock plc. I authorise my existing ISA provider to provide Northern Rock plc with any information, about the Cash ISA and to accept any instructions from them relating to the Cash ISA being transferred.
Where I must give notice to close or transfer part of the existing Cash ISA, or the existing Cash ISA contains a fixed-term deposit that has not reached its maturity date, I instruct my existing ISA provider to either: (tick the appropriate box)
A.
Wait for the full notice period to end or wait until the maturity date (whichever is relevant) before going ahead with this transfer; Please note fixed rate products can be withdrawn without notice and deposits may be returned.

or

B.
Depending on the terms and conditions, carry out the transfer as soon as possible – I will accept any consequential loss of interest or charges which may be applied.

I am thinking I should select Option ‘A’. If I did this and sent the transfer form off before my current Nationwide e-Isa bonus expires (31st October 2012), would they then wait until the 31st October 2012, before transferring the monies? ( Am I also correct in thinking that this date is the “Maturity Date”?).

Obviously I don’t want to fill the form out or do it all in the wrong sequence and mess up taking out the new e-Isa and transfer, So would really appreciate some pointers on the above.

psychic_teabag

Option 'A' generally applies when transferring a fixed-term ISA : transferring before the maturity date would incur a penalty of some sort (if it's allowed at all). I assume your Nationwide ISA is instant-access and so there is no penalty to close the account early. (The bonus runs until end of October, but that's not the same as a maturity date. You don't need to wait until then before you can access your money.)

If Nationwide is paying you more than 2.85% (inc. bonus), there's a case for leaving the money there as long as possible. But need to strike a balance between that and leaving the money at Nationwide after that date, when the rate will have fallen. I think transfers should take place within 7-10 days or so, so it probably is worth getting things rolling soon.

(Some ISA providers start paying you interest as soon as you put the transfer form in, which means you get double interest. Don't know if Virgin do that or not.)


The 2.85% is (probably) variable rate - there's no guarantee that it won't fall, just because there's no bonus. They may write to you to tell you that the rate has fallen, but I think they are only required to publicise it in press. So you need to keep an eye on the rates. A good time to check rates would be March/April, when the good ISA rates tend to be available. You might want to consider transferring again around then. (Unless rates have fallen even further by then,of course.)


You could probably just go into Virgin and get them to fill in the transfer form for you, if you're in any doubt.

solorize

Thanks for the reply.

So just to recap, I would need to select option 'B' and setup the new e-ISA now then get the transfer form filled and submitted ASAP?

pqrdef

There's another case that's not really covered by this wording. Accounts exist that only pay bonus interest on a fixed date, or the anniversary, so you have to keep the account open until then, with at least a minimum balance, or you don't get any bonus.

They wouldn't necessarily call that a notice or fixed-term account, and they wouldn't necessarily call the loss of interest a penalty. Banks can be tricksy.

If there's interest due on 31st October, then personally I'd wait to see it in the account. If the interest date is December or March, they wouldn't expect you to keep the account that long at 0.0% interest (MSE would have exposed that as a scam).

solorize

[FONT=&quot]I’ve just checked on my current e-ISA and interest was paid on the 31st August 2012, so I guess I am safe to start the transfer process.

If I transfer hypothetically on the 31st October 2012 would Nationwide add 2 months interest onto my final account, for the 2 month period between 31st August (when they paid the annual interest) and 31st October when I would be leaving them?

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