Santander Fixed Rate Cash ISA

paulbarton

Interesting dilema. My wife opened a santander fixed rate 2 year cash ISA and paid in before the end of the financial year 2019. She then made 2 payments in April and May 2019. She then tried to pay in in June 2019 and was refused. They simply wouldn't take the payment. She then tried to open a new cash ISA but was refused because she'd made a transfer into a cash ISA in the 2019/20 year (ie April and May). So she's currently stuck in a hard place because she can't open a new Cash ISA this financial year. Santander don't seem able to help and I'm unsure of what to do.

xylophone

Use the balance in a stocks and shares ISA?

Or use a non ISA savings account?

https://www.thisismoney.co.uk/money/article-1583859/Best-savings-rates-General-savings-Internet-branch.html

eskbanker

paulbarton wrote: »

Interesting dilema. My wife opened a santander fixed rate 2 year cash ISA and paid in before the end of the financial year 2019. She then made 2 payments in April and May 2019. She then tried to pay in in June 2019 and was refused. They simply wouldn't take the payment. She then tried to open a new cash ISA but was refused because she'd made a transfer into a cash ISA in the 2019/20 year (ie April and May). So she's currently stuck in a hard place because she can't open a new Cash ISA this financial year. Santander don't seem able to help and I'm unsure of what to do.

As above she'll need to put her money elsewhere into a different type of product, but just to explain what's happened, for future reference, she's fallen foul of two separate rules:

1. Most fixed-rate/term savings products (ISAs or taxable) only allow deposits within a shortish initial window, e.g. the first 30 days, so providers won't allow anything more to be paid in after that as it's not permitted by the Ts & Cs.
2. Separately, under HMRC rules, it's only possible to pay into one ISA of each type in any given tax year - some providers offer a 'split ISA' capability where they effectively treat multiple ISAs as one, but Santander isn't one of these.

paulbarton wrote: »

She then tried to open a new cash ISA but was refused because she'd made a transfer into a cash ISA in the 2019/20 year (ie April and May).

Also, it may seem pedantic but 'transfer', in the context of ISAs, has a specific meaning of moving money from one ISA to another, whereas what she did was pay new money into a cash ISA this tax year. If her only contribution to a cash ISA this tax year was a transfer from another one (i.e. the money was from a different year's contributions) then she'd still be free to open a new one....

paulbarton

Thank you everyone who has responded. It confirms my investigation. It's a sad reflection on santander but life is about learning - I've learned.
Thanks

G_M

not sure why the HMRC tax rules are a sad reflection on Santander......


Blame the government in this instance!

Zanderman

paulbarton wrote: »

Thank you everyone who has responded. It confirms my investigation. It's a sad reflection on santander but life is about learning - I've learned.
Thanks

You'd get the same with any bank in this situation - it's not a reflection on Santander at all (how is it their fault?) - it's a reflection on someone not reading the details about a fixed term product.

eskbanker

paulbarton wrote: »

Thank you everyone who has responded. It confirms my investigation. It's a sad reflection on santander but life is about learning - I've learned.
Thanks

What exactly have you learned if you still believe it's a sad reflection on Santander?

Note that the summary box for this account, as at 29 March, clearly stated not only:

Deposits can be made up to and including 30 April 2019. No subsequent additional deposits allowed.

but also:

This 2 year fixed rate ISA is a cash ISA. Please be aware that if you make deposits for the 2018/2019 tax year which are less than the full ISA allowance for that tax year, you won’t be able to pay into another cash ISA in the same tax year to use the remaining allowance.

How could they have spelt it out any more clearly than that?

msallen

paulbarton wrote: »

Thank you everyone who has responded. It confirms my investigation. It's a sad reflection on santander but life is about learning - I've learned.
Thanks

What a sad reflection on your ability to learn.