Top Cash NISAs 2014/15

apt

For Coventry BS customers who had cash ISA with Coventry at the end of 4 February 2013 the best (or least worst) current cash ISA is the Coventry Reward ISA paying 2.5% variable.

Kat76

I feel very strongly that the government should have implemented a further rule to protect the public who had faithfully invested their £5940 for 2014-15's tax year at the beginning of the year into a fixed rate ISA account.


With the announcement that ISAs from July 1st could be topped up to £15K, the fixed rate offerers such as Halifax and Nationwide were really quick to impose time limits for the topping up. But who in reality can instantly get their hands on ~£10K???


Surely a rule needs to be implemented that allows either:
1) two cash NISAs to be held for this unusual tax year to allow a 2nd account to be opened for the top-up amount
2) penalty-free (and no loss of interest) transfer out of the initial prior-to-1stJuly investment to another provider/account which will allow top ups anytime until end of tax year.


Martin & team - please do you think you could take this issue up with the appropriate authorities?

jimjames

Kat76 wrote: »

I feel very strongly that the government should have implemented a further rule to protect the public who had faithfully invested their £5940 for 2014-15's tax year at the beginning of the year into a fixed rate ISA account.


With the announcement that ISAs from July 1st could be topped up to £15K, the fixed rate offerers such as Halifax and Nationwide were really quick to impose time limits for the topping up. But who in reality can instantly get their hands on ~£10K???


Surely a rule needs to be implemented that allows either:
1) two cash NISAs to be held for this unusual tax year to allow a 2nd account to be opened for the top-up amount
2) penalty-free (and no loss of interest) transfer out of the initial prior-to-1stJuly investment to another provider/account which will allow top ups anytime until end of tax year.


Martin & team - please do you think you could take this issue up with the appropriate authorities?

I really don't think you have a case at all. The rules were announced before the start of the tax year so you could have chosen to wait until July and put the full £15k in if you have the money. If you don't have the money then it's an irrelevant argument.

The rules for fixed rate ISAs are no different to normal and providers have actually been flexible in allowing additional deposits. The normal case with fixed rate ISAs is that you cannot make ANY additional payments after a short, set period.

If you don't have the £10k now why not save it in a far better account paying more than an ISA and then move it into an ISA next April. The use it or lose it mentality promoted by MSE is irrelevant to most people as you have said you don't have the £10k available to put in the account anyway.

Kat76

The "not having the money" is not irrelevant - if someone can get together the ~£10K before the end of the tax year, they should be able to invest it in a NISA right up until the last moment, regardless of whether they have invested the initial £5940 in a fixed rate ISA before 1st July or not.

colsten

Kat76 wrote: »

The "not having the money" is not irrelevant - if someone can get together the ~£10K before the end of the tax year, they should be able to invest it in a NISA right up until the last moment, regardless of whether they have invested the initial £5940 in a fixed rate ISA before 1st July or not.

They can put more money into their ISAs if they have chosen one that suits their requirements, e.g. a regular saver one or an instant access one.

If the ISA terms were that deposits can only be made in a short window of time, in return for a higher interest rate, such an ISA would clearly not have been a suitable choice last April for somebody who wants to deposit all year long, or right at the end of next March.

The market is full of different offers, nobody is forced to take out fixed rate/term ISAs.

Kat76 wrote: »

With the announcement that ISAs from July 1st could be topped up to £15K, the fixed rate offerers such as Halifax and Nationwide were really quick to impose time limits for the topping up.

I am afraid, you got this totally the wrong way round. They did not impose limits for the top up as a result of the increased allowance. Their time limits existed before then, and what they were quick at announcing was an extra deposit window for their fixed rate products.

As always, it pays to read the T&Cs before making a commitment. They were all available at the time the new 2014-15 ISAs became available. So was the fact that the allowance would increase on July 1 , and all providers were very quick of the mark telling their customers how their fixed rate/term products would accommodate change in legislation.

If you are indeed desperate to make use of your full allowance before the end of the tax year but have got a fixed rate cash ISA which now no longer takes any deposits, you can look into making your deposit into an S&S ISA. However, be aware there might be costs involved in transferring cash out of S&S ISAs, and in having an S&S ISA in the first instance.

Overall I agree with jimjames, you have no case.

jimjames

Kat76 wrote: »

The "not having the money" is not irrelevant - if someone can get together the ~£10K before the end of the tax year, they should be able to invest it in a NISA right up until the last moment, regardless of whether they have invested the initial £5940 in a fixed rate ISA before 1st July or not.

If someone wanted to invest in an ISA at a later date during the tax year then a fixed rate ISA with very limited deposit period isn't the right choice - this has nothing to do with the change to the ISA rules this year and has always applied to pretty much every fixed rate ISA. So if this was a priority then you should have chosen the appropriate ISA for your requirement to pay in across the year.

I'm still not sure why if you don't have the money now then you can't use the £15k ISA allowance next year and save the money at 5% or so in the meantime which is far better than an ISA anyway.

johncolescarr

A quick word of warning from anyone who needs to have instant access to money held in a fixed rate ISA. Not sure if its bank specific but I recently tried to transfer out the balance from a Santander 123, 2 year fixed rate ISA. Initially, I was told that I couldn't by the call centre, when challenged that I have a legal right to access it they put me in contact with their ISA team, who advised that I had to close the account to transfer the money, and it would take 7 days and could only be done in branch.

None of this was in the Terms when I had a look; it said I could transfer only the full balance.

After much phoning I eventually managed to ascertain that it would take 48 hours and should have my money in 2 days (including bank holidays as I was told their back office staff keep working). This was later revised to 2 working days and as it was a bank holiday weekend and I am crossing my fingers to make sure it comes in time as I need the money to complete on a house sale!

I know 48 hours is not the end of the world but in my case it could have scuppered my move, all other ISAs I've had I could access instantly and I assumed that fixed rate would be the same.

Archi_Bald

johncolescarr wrote: »

all other ISAs I've had I could access instantly and I assumed that fixed rate would be the same.

Fixed rate invariably only comes with fixed term, and any early redemption will come at a hefty penalty. That is, if early redemption is an option at all. Its is to be expected that you don't have immediate access, as you agreed to a fixed term at the outset.

For the Santander 123 Fixed Rate ISA, it clearly states "On early closure, a penalty equivalent to 120 days’ interest applies." http://www.santander.co.uk/uk/isas/123-2-year-fixed-rate-isa

Other ISAs and/or non-ISA savings accounts have similar terms.

If you know you need your money in the next few months or couple of years, putting it into an ISA could be a very bad move as you can earn a lot more interest outside ISAs.

jimjames

johncolescarr wrote: »

A quick word of warning from anyone who needs to have instant access to money held in a fixed rate ISA. Not sure if its bank specific but I recently tried to transfer out the balance from a Santander 123, 2 year fixed rate ISA.

I know 48 hours is not the end of the world but in my case it could have scuppered my move, all other ISAs I've had I could access instantly and I assumed that fixed rate would be the same.

It's not bank specific. Or even ISA specific.

If you sign up to a 2 year fixed rate whether it is an ISA or a mortgage the bank is pricing that product on knowing they have your money for that period. If there was no penalty then anyone would just take out the fixed rate and switch to a better option that came up at any point during the term.

I hope you checked what mortgage you signed up to

hgt

Do people not read what they are signing up to anymore! I can't believe the people on this thread simply didn't read the terms of the products they applied for!

"I opened a fixed account and now can't put any more money in" - Well of course you can't, you're lucky some providers chose to allow a July top-up.

"I've signed up to a fixed term account and they won't let me have instant access to my cash" - Wow now that's a big surprise isn't it! Next you'll be saying they stung you with a loss of interest for early closure!