Transfer Question

monki_man

There has been a few debates as to how much days of interest you lose when you tranfer from one isa provider to another. I've read in some post that it can take up to four days, ten days or even longer!

My quesiotn is, I've recently transfer my Abbey postal isa over to First direct. The first direct high tax free interest rate will decrease to around 4% on the 1st October. Therefore I want to transfer it back to the abbey or any other isa that offers a high rate of interest without any penaties (i.e. A&L). Can someone advice me when I should request a transfer? Is it a week before the higher interest rate for FD expires? on the day it expires etc.

jimclark1967

Hi MM,

Firstly A&L isn't without penalties, they'll charge you £25 if you ever want to transfer away from them.

There's a difference between how long the ISA transfer process takes from start to finish (filling in forms, proving identity etc..) and how many days interest will be lost (hopefully not many while a cheque clears)

It depends entirely on the efficiency/common sense of the providers you're moving between as to how long in advance to request a transfer. You could even contact them a month in advance and ask for a transfer on or around a specific date (if they'll let you)

So your guess is as good as mine

I must admit I was doing the same as you, transferring from Abbey to FD for 6 months. Filled in the transfer request form, sent it back to FD then 2 weeks later decided I really couldn't face the hassle of moving it back again & chance of things going wrong so rang Abbey up, found out the transfer hadn't happened yet and cancelled it

One of these days we'll get a new ISA to look at with no maximum subscription/transfer limit, no short term headline grabbing rate and no transfer penalties. Or is that wishful thinking?

derrick

The bank you are transferring to does the work,i.e. they request it from the bank you are with, they are allowed up to 30 days to do the transfer, this does not mean you can lose up to 30 days interest, any days interest lost (if any as all banks pay the interest up until the day it leaves the account,then the receiving bank pays it from the day they receive it) can be 0 days or the amount of time it takes for the cheque to be received,which should be no more than 4 days if a weekend is involved,and you will have no control over that.
I have moved 4 times over the years and only once was there a problem, with Abbey, and they reimursed me the lost interest and gave me £50. for incinvenience, with the others I lost no days interest.
HTH