Variable rate interest rate - new issue?

whateverg

I have relatively recently opened a Cynergy Online ISA at 0.9%. This is a variable rate account. I have now seen online that the account has a 1% interest rate. My understanding of variable interest rates was that if it was to increase then it is automatically increased on your account. However, a customer service agent has told me that this was not the case because they opened a new issue of the same account. Is this a correct way for the bank to get away with not increasing my interest rate? Is my only option now to open a new account and transfer over? Thanks

eskbanker

The practice you describe is standard and there are no rules against it, even if you feel it's underhand in some way, so there is no obligation for the interest rate on existing accounts to be modified if/when newer issues are released.  You can indeed transfer to the newer one in order to benefit from the higher rate, assuming it accepts transfers of course.... 

Edit: they do accept transfers and make it easy to do so:

Q. How can I switch my existing Cynergy Bank Online ISA to a new issue of Cynergy Bank Online ISA?

You can switch your existing Online ISA to a new issue that is currently on sale. To do this:

• Log into Online Banking,
• Select ‘fast track apply’ and open the new issue of Online ISA.
• Once this is open, select your existing Cynergy Bank Online ISA and choose the option ‘Internal transfer and close’.
• You will be asked which account you want to transfer to, and you should select your new issue of Online ISA.
• The balance in your existing ISA, including any accrued interest, will be transferred over on the same day and your old ISA will be closed.