Another ISA question!!!

battyman

Hi .I hope somebody can help me out with a ISA question as it comes around to the new financial year.

I opened an ISA with the HSBC at the end of March 2012 which had a years worth of bonus rate [2.58% in total] and fully funded it over this current financial year.The rate has now dropped to 0.2% and obviously i am now looking for a better return.My intentions were to open an e-ISA also from the HSBC at 1.75% in the new financial year and then transfer in the funds from the old bonus rate defunct ISA into it on top of my 2013/14 allowance.The people at the HSBC bank have told me i am not allowed to do an internal transfer between ISA accounts but were a little bit vague as to their reasons.I have read the t&c of the original bonus ISA and it does not mention specifically that you cannot transfer out to another better paying ISA within the same company.

My questions are :
1.Is this a general rule imposed by the HSBC ?
2.Is it a general ISA rule imposed by the HMRC?

The easiest option would be to open up a new ISA with another provider with a decent rate and then transfer in the money from the HSBC bonus defunct ISA..Although i would prefer to keep all my accounts together as HSBC is my primary banking account i was wondering if the information given to me was correct.

Thanks in advance.

david78

It sounds like rubbish to me. There is no such general rule.

It is possible the account doesn't allow transfers in. If so the best thing is to transfer away to another provider.Having the ISA with a different provider than your main bank account shouldn't be a big deal,

BobQ

david78 wrote: »

It sounds like rubbish to me. There is no such general rule.

It is possible the account doesn't allow transfers in. If so the best thing is to transfer away to another provider.Having the ISA with a different provider than your main bank account shouldn't be a big deal,

I agree the problem is probably not what OP assumes. Its the new ISA that has to allow transfers not the old ISA. The Key Features Document for the current e-ISA makes it clear that transfers in are only possible from other ISA providers (ie not HSBC).

Transfers in from other providers are permitted. However,

transfers in to the HSBC Cash e-ISA from the HSBC Variable

Rate Cash ISA or HSBC Fixed Rate Cash ISA are not

permitted. This does not affect your option to subsequently

transfer out to another provider.

OP Note that there is little point in going to this new product, its a very poor rate 1.6% <£15K and you can get better rates elsewhere (eg Coventry BS).

Also remember that you ask the new ISA provider to transfer the ISA - ie do not close the account yourself.