'Upgrading' Santander ISA then transferring it

Ashen

Hi,

I have a Santander ISA due to mature at the end of the month, and I'm thinking of either transferring it into a S&S ISA or a flexible cash ISA with another provider.

As you can 'upgrade' a Santander ISA close to maturity, is there any reason I shouldn't upgrade it to a Santander E-ISA or similar, and then transfer it, rather than waiting for the end of the fixed term?

Thanks

badger09

Ashen wrote: »

Hi,

I have a Santander ISA due to mature at the end of the month, and I'm thinking of either transferring it into a S&S ISA or a flexible cash ISA with another provider.

As you can 'upgrade' a Santander ISA close to maturity, is there any reason I shouldn't upgrade it to a Santander E-ISA or similar, and then transfer it, rather than waiting for the end of the fixed term?

Thanks

You say your Santander ISA matures at the end of this month, which implies it is a fixed rate/fixed term ISA.

Is it?

Or do you mean the it is an instant access ISA but the interest drops at the end of the month?

If it is fixed rate, why do you think 'upgrading':cool: it to an E-ISA is beneficial?

Krash420

What's the interest rate you're currently getting, and what is the interest rate on offer with an E-ISA?

If the former is higher then wait, if the latter is higher then "upgrade" as soon as you can. Simples.

Ashen

It is a fixed rate/term ISA, but Santander say you can 'upgrade' an ISA a month before maturity to another of their ISA products.

The purpose of doing the 'upgrade' to an E-ISA would be that this might effectively end the fixed-rate ISA early without penalty so I can then transfer the less-restrictive 'E-ISA' to another provider earlier - just wondering in case I'm missing anything there.

sjw11

I too got the letter offering an "upgrade" but I simply cannot see any advantage of moving from (for me) 2.3% to at best 1% for one of their E-ISAs early
You seem to be implying that anything on offer now from other providers are likely to go down even further before the end of the month, and that you should get in now. I dont see it like that. I would want to gain maximum interest to the very end before moving to something else, which is bound to have a lower rate.
Are you going fixed rate or easy access and waiting for the outcome of the EU decision ?

badger09

Like sjw11, I can see absolutely no point in doing what you are proposing.

frankmassiebonsai

I think I understand the proposal as I'm in a similar situation.

I have 10k in a fixed Santander ISA paying 2.3% which ends June 1. I also wondered about using the 'upgrade' service.

Can I (& OP) transfer the 10k to an easy access isa a month early, sacrificing one month at 2.3% but avoiding a penalty, and allowing me the chance to withdraw 10k into current accounts paying up to 5%?

Grateful if anyone knows the answer to this?

Krash420

There's no reason why you can't do that. In fact there's very little interest actually lost, because as soon as it's in the "upgraded" ISA, transfer it to a one that allows withdrawals, the rate you receive between this time is all that you'll lose, because as soon as it hits that other bank account you should transfer it out to earn 4%+.

That said, make sure you have the current accounts which pay 5% before you do it, you don't want to waste time trying to open them only to find you can't or that it's going to take some time.