First Direct ISA rules

w14eye

First Direct is offering a 6.25% Isa until Oct 2005. I thought I would be clever and transfer my current ISA over and transfer again out of the First Direct in Oct but their small print says they will only transfer to another First Direct account or post a cheque. If I get a cheque will this mean I'll have lost my years ISA subscription?? Does anyone know?

ED

w14eye - welcome to MSE.

The First Direct e-ISA is the subject of much debate (+ confusion) in another thread, here :

http://forums.moneysavingexpert.com/showthread.html?t=28198

Hope this helps...?

isasmurf

w14eye wrote:

First Direct is offering a 6.25% Isa until Oct 2005. I thought I would be clever and transfer my current ISA over and transfer again out of the First Direct in Oct but their small print says they will only transfer to another First Direct account or post a cheque. If I get a cheque will this mean I'll have lost my years ISA subscription?? Does anyone know?

w14eye, that is against ISA rules. If they are saying that then complain to the Inland Revenue. Banks must allow you to transfer to any other ISA manager.

Paul_Varjak

It is my understanding too that it is against the rules. I suspect they mean that if you close your ISA account they will only pay the money into another First Direct account or pay by cheque.

Are you sure it uses the word 'transfer'?

Bargain_Rzl

I'm an FD ISA subscriber, and I think - from various threads on this board - that the cheque that they post can be to a new ISA provider, thus counting as a transfer.

YorkshireBoy

Bargain_Rzl wrote:

I'm an FD ISA subscriber, and I think - from various threads on this board - that the cheque that they post can be to a new ISA provider, thus counting as a transfer.

I transferred my ISA last year from Safeway (Abbey) to IF and can confirm Abbey sent a cheque. I know this because they forgot to sign it and it took 4 weeks to resolve! Managed to get £20 compensation but thats not the point. I mean a bank (employee) forgetting to sign a cheque - now thats ridiculous!

knight-on-the-town

On the faceof it First Direct looks the best deal for lump sum BUT according to T&Cs must give them 30 days notice to transfer i.e. early September. That way u get the 6% for the first six months and avoid the drop to 4.25% after that by transferring.

BUT IS IT THAT GOOD? I don't think so given the messing about required ... Consider the real return...

... U can get a straight 5.4% Mini ISA with no initial bonus, so someone saving £3,000 would end up earn £162 per year. (Avoid A&L as exit penalty destroys real rate of return) but by ditching and switching to and then from First Direct to say Abbey (5.35%) would earn only about £10 extra interest over the year (cant be too exact as working it out based on compound interest of 6.05% for 6 mths and then 5.35% for next six months is a pain)

EcO_3

I talked to FD about how to transfer money out. They told me to give them my account number and sortcode (I'm with cahoot). So whenever I want to transfer the whole lot, it's possible. No cheque and no need for a FD account there... I suppose it should work in the same way if you transfer your ISA account to another provider. Just open your other ISA account and transfer the whole lot