BMW Cash Mini Isa

CliffI

This is really annoying or is it just me? Last week I opened a new BMW Cash Mini ISA (operated by NEWCASTLE BS) - it's offering the top APR, is web based and is quite fiddly to operate but... on the website it says:

"Please note that funds are limited so the offer may be withdrawn at any time."

To me that suggests, that you should open an account quickly as they may be withdrawn BUT... get this: they have just told me on the phone that also means that they will eventually stop taking deposits EVEN FROM EXISTING CUSTOMERS.

I opened my account with the minimum of £100 and wanted to make more payments throughout the financial year. THAT means that BMW Savings/Newcastle could effectively slash my tax free allowance and there's nothing I can do about it.

I've never heard of that before, and it's really annoying. However I may just be in time to close the account inside the cooling off period.

CliffI

Aegis

Well, make your payments until they stop you from doing so, and at that point transfer somewhere else and use the rest of your ISA allowance there instead.

You might as well stick with the top paying one while you can!

CliffI

You can only open one cash mini ISA per year, and April 6 is a long way away. But worse than that, it says in their conditions that you can only make one deposit and that's final. The accounts are going to be withdrawn soon, so there could be quite a few people with small amounts tied up, who've lost their ISA cash allowance for 07/08. And I think that's plain wrong.

Aegis

Surely the allowance won't be lost because they can transfer their account to another provider and use their allowance there instead? The allowance is a national thing, not a branch-based choice, so surely that's the way to do it. My notes on ISAs certainly don't appear to preclude transfering the current year's account from one provider to another and continuing to build up to your £3k subscription, however what I have in front of me isn't a definitive guide to ISA law, so maybe someone with a bit more knowledge could step in and confirm this?

CliffI

*They will only accept one payment in
*They are going to close the account to new customers and that includes not allowing more payments in (even if you wanted to make another deposit you couldn't as per the point above).

So... if you open the account now with the minimum £100, you will lose your right to invest the remaining £2900 until next April.

That's exactly the problem, and I think this is a serious issue.

C

Aegis

What I'm getting at though is this: is the allowance really lost?

If you have £100 in the BMW cash ISA and they tell you that they're not going to accept anything more from you, can't you just transfer your 07/08 Cash ISA to another provider and use the remainder of your yearly allowance with the new provider instead. There's certainly nothing stopping you from transfering out (unless this is specifically mentioned in their Terms and Conditions), and like I said, a first glance look at the ISA rules said nothing about not being able to add to your 07/08 ISA after transferring it from one provider to another.

Can anyone more familiar with cash ISAs confirm if this is possible or not?

If it's not possible, then yes, it's a bit of a raw deal!

RayWolfe

All FIXED RATE savings work on that principal. If this is a fixed rate account then it will be so. You can't have everything on a market beater so it's always advisable to read the T&Cs BEFORE you start.

CliffI

I take the point about reading the terms and conditions, but I still think they're being a little vague. I've never heard of an ISA that you can't add to, but I did think the high APR looked a little to good to be true. Unlike limited issue bonds etc, you can't open another cash ISA in the same year so that's a huge loss of tax free savings if you make a £100 deposit.

C

RayWolfe

The fact that you may not be able to add to it was there in the beginning. AND other banks etc., DO do the same. You must always be careful whatever product you are buying ... it's a wicked world out there. ;-)

ukdutypaid

I'm with cliff here.....
It's got nothing to do with it being fixed rate, or their own single deposit T's C's.

100 pounds in... They refuse further deposits..
You open a second ISA somewhere else, transfer in your 100 and make a deposit for the 2,900 you have to use up of the allowance..

As per the Kent Reliance application form..
You may
"make a deposit by cheque and transfer in additional funds from another provider"

You can't open two means.... YOu can't use "an" allowance of 3k in one and then use another allowance of 3k into another..

The application form at Lloyds says "transfer in" as well as having the option of adding to it, up to your annual allowance of 3k, "DD/SO"

You ain't lost it guys....