Nationwide ISA question

gabthoms

I have a passbook ISA with Nationwide and wrote to them asking if I could transfer it to there members bond ISA as it pays a better rate but I was told that if I transfered it then it would count as this years subscription. Can that be right? Surely I should be able to transfer it internally just the same way as a transfer to another provider would work?

Any help would be appreciated

pinkonion

Depends on the terms and conditions of the accounts. Under there anti-brand new customers only campaign I'd have thought they wouldn't have this sort of restriction though!

esalan

I think you will find that, technically, the Passbook account and the Member's bond are in fact the same account (same a/c number) and transferring should NOT count as this year's subscription.

Be aware though, that with the Member's bond, you are only allowed to pay in once during the year, whether it is the full £3000 or just £1. In othert words, if you can afford it, invest the full £3000 in one go!

Pheno

I have a passbook ISA with Nationwide and wrote to them asking if I could transfer it to there members bond ISA as it pays a better rate but I was told that if I transfered it then it would count as this years subscription.

They told me the opposite - that in order to set up a members bond I had to first apply for a normal ISA and then transfer it. If it turns out they won't do this then I'm going to be furious!

grumbler

I assume that your passbook ISA is Instant Access ISA paying 4.85% now.

I just looked to their website and found this:

Members' ISA Bond : Using the Account :

Paying money in
You can save up to £3,000 each tax year and choose to split your £3,000 annual subscription between an Instant Access ISA and a Members' ISA Bond. This limit applies to the total credits made to your account during the year and not the balance. So for example, if you pay £3,000 into your ISA and withdraw £1,000 you cannot replace the funds withdrawn.

This is quite unusual: Member's ISA Bond is not a separate ISA, but a part of Instant Access ISA that you already have. You can have two parts within one ISA and it looks like you cannot move money between this parts after you have made a choice when paying money in. I think this clarifies the answer they gave you.

I wonder if they allow transfers from other providers to their Member's ISA Bond. I think they don't. If they do, you theoretically could move your ISA to some other provider, them move it back to Member's ISA Bond :mad:

Milarky

grumbler wrote:

I assume that your passbook ISA is Instant Access ISA paying 4.85% now.

Member's ISA Bond is not a separate ISA, but a part of Instant Access ISA that you already have. You can have two parts within one ISA and it looks like you cannot move money between this parts after you have made a choice when paying money in. I think this clarifies the answer they gave you.

I wonder if they allow transfers from other providers to their Member's ISA Bond. I think they don't. If they do, you theoretically could move your ISA to some other provider, them move it back to Member's ISA Bond :mad:

Well I've got this one - money in both pots, so to speak - and AFAIAA you can move the entire Instant Access ISA into the Members ISA Bond [subject to being a member of Nationwide for 3+ years, of course]. In fact this is what my mother did - although in her case she subscribed to the Bond and transferred a previous year's subscription - by closing the IA. Maybe this is the only way to do it. I seem to recall being told about it being a once-only transfer [i.e. no transfer from Bond to ISA then possible]. However it was possible to transfer from Bond to another provider [First Direct] without notice/loss of interest I found. And the bond should accept transfers back in - effectively reversing any transfer out.

Generally I'm not overexcited by this ISA - I'm looking at the top tiered rate ISA from HSBC since it has a slightly higher rate, is IA, and pays interest monthly [and is CAT standard] Any observations?

gabthoms

I've enquired a bit more and it is ok for me to transfer my Nationwide ISA to their ISA bond without it affecting this years allowance. The HSBC ISA sounds good if you've got enough money to get the higher rate, which I haven't unfortunately!