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penalty

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  • eskbanker
    eskbanker Posts: 37,007 Forumite
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    kungfuman said:
    I have a question on cash isa interest penalties and thought it will be easier posting here than starting a new thread.

    Looking to transfer isa into santanders 2 years fixed at 4.2% where they have an 120days penalty on withdrawal.  

    Is this a penalty on the interest already accrued or essentially a fixed penalty amount so you can lose more than you put in if you decided to withdraw say in the first 120 days?
    It's the latter - if you withdraw within the first 120 days of that fixed term then you'll get back less than you paid in, so the wording will refer to something like 'a penalty equivalent to 120 days interest' rather than actually saying you'd lose the interest as such.

    This is all discussed at great length within another recent thread:

    https://forums.moneysavingexpert.com/discussion/6394251/are-all-early-closure-penalties-actually-enforceable-and-lawful/p1
  • Thanks for the reply. And just for clarity, would you know that if withdrawal was made before the end of the 2 years fixed term that interest would still be paid up to that point but minus the 120days penalty? It’s that that I read the maturity for the Santanders isa is nov 2024 and then the interest would be credited thereafter so wasn’t sure if they still paid the interest before that. Thanks 
  • refluxer
    refluxer Posts: 3,183 Forumite
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    edited 14 October 2022 at 1:49PM
    kungfuman said:
    would you know that if withdrawal was made before the end of the 2 years fixed term that interest would still be paid up to that point but minus the 120days penalty? It’s that that I read the maturity for the Santanders isa is nov 2024 and then the interest would be credited thereafter so wasn’t sure if they still paid the interest before that. Thanks 
    Yes, interest is paid either in full on maturity (or possibly annually, depending on the T&Cs) or minus the penalty upon early withdrawal, closure or transfer. 
  • savit4l8er
    savit4l8er Posts: 334 Forumite
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    edited 14 October 2022 at 6:22PM
    kungfuman said:
    I have a question on cash isa interest penalties and thought it will be easier posting here than starting a new thread.

    Looking to transfer isa into santanders 2 years fixed at 4.2% where they have an 120days penalty on withdrawal.  

    Is this a penalty on the interest already accrued or essentially a fixed penalty amount so you can lose more than you put in if you decided to withdraw say in the first 120 days?
    Fixed amount so yes, you can get back less than you put in. 
    Yeah, cheers but nah, I will stick with yes,  thank you and no. 

    Thank you. 
  • Tharweb
    Tharweb Posts: 1,195 Forumite
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    I'm glad I found this thread, I was going to make a new post but I'm asking pretty much the same thing.

    I made a mistake of taking out two 2 year fixed cash ISA's for me and the other half in April 22, one with ~£50,000 deposit @ 1.75% and one with ~£60,000 @ 1.65%. I too was trying to work out last night if it was worth moving them and taking the hit with a penalty.

    Although I will stand to lose more than the OP, in my case the penalty for the £50k one is 150 days interest, which I have calculated to be ~ £365 and the other 180 days interest which I have calculated to be ~ £484,  if I transferred them, (ironically, Kent Reliance is the best 2 year fix and the £59k is with them :# ), I would get back £2,170 and £2,569 respectively.

    I just don't want to find myself in the same situation in a few months time so am wondering whether to go for it or wait  :/
    This site has saved me a fortune :money: ...it's also cost me a fortune! :doh:
    © Tharweb 2006 :D
  • Albermarle
    Albermarle Posts: 27,776 Forumite
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    I just don't want to find myself in the same situation in a few months time so am wondering whether to go for it or wait  

    Many posters are asking the same question in a daily basis, so just read through the forum, although nobody knows the answer of course.
  • Beddie
    Beddie Posts: 1,011 Forumite
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    Perhaps pay the penalty and put it into easy access for now, some good rates out there. You can then decide when to take a fix and maybe do it in stages to hedge your bets.
  • Tharweb
    Tharweb Posts: 1,195 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Beddie said:
    Perhaps pay the penalty and put it into easy access for now, some good rates out there. You can then decide when to take a fix and maybe do it in stages to hedge your bets.
    Thank you, yes, of course that is another option.
    This site has saved me a fortune :money: ...it's also cost me a fortune! :doh:
    © Tharweb 2006 :D
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