MOVING ISAs LOSS OF INTEREST

Jake'sGran

Our accumulated ISAs are with Yorkshire Bank earning 6%. It is a large amount i.e. over £40k. If I move it to Kent Reliance to earn 6.21% it would only earn an extra £89 in one year. Does anyone know, does the money stay uninvested for a few days? If so, it hardly seems worth moving it. What do you think.

ManAtHome

I don't normally move for less than 1/2 percent - that can take up to 3 months to start paying off, so less than 1/4 could take 6 months (and rates could have changed again by then).

YorkshireBoy

Moving from 6.00% to 6.21% will take 30 days to break even per day lost in transit.

If Kent Reliance backdate the credit (for interest earning purposes) to the day they receive the cheque/paperwork, you may lose only 2 days interest - meaning it'll be two months before you recover your losses.

If, however, Kent Reliance operate differently to YBS, Halifax, et al, or

if YB post on a Thursday/Friday, or

if there's another Post Office strike, or

if any other event happens(!)

then it'll take considerably longer to recover your losses.

To add another factor, who knows what each provider will do with their rates, and what the BOE will do with their rate, in the next few months?

Special_Saver2

Well, why not transfer your money to a 30 Day Notice Mini Cash ISA with YBS? It is currently paying 6.15% (which includes a first year bonus). As it would be an internal transfer, you would not lose any interest. Of course this time next year you might be asking yourself the same question you are asking now but at least this sorts things out for a year quite easily with minimum fuss.

http://www.ybs.co.uk/savings/taxfree/30day_notice_isa/index.jsp

Edit: Sorry, just saw that your first post says Yorkshire Bank. If your ISA is with Yorkshire Bank and not Yorkshire Building Society then please ignore my advice above!

YorkshireBoy

YorkshireBoy wrote: »

Moving from 6.00% to 6.21% will take 30 days to break even per day lost in transit.

Just noticed that the YB ISA pays 6.05% on balances over £15K.

http://www.ybonline.co.uk/0,,38861,00.html

This acts to lift the 30 day recovery time to 39 days, meaning over two-and-a-half months to recover your (minimum 2 day transit) losses.

Jake'sGran

Thank you all. I have decided to leave it where it is and probably go for the 6.05% with Yorkshire. To Special Saver, my apologies, it is Yorkshire Building Society.

Special_Saver2

If your money is in a YBS eISA earning 6.05%, are you not tempted to switch to the YBS account that I mentioned above?

You would make £40 over the next year just for filling in a piece of paper requesting the account is transferred to the 30 day notice account. It makes sense as long as you can remember to transfer back to the eISA or a different account once the 1 year introductory bonus has run out. I use google calendar to remind me of such things.