Transferring Fixed Cash ISA and Paying Penalty

Reed_Richards

refluxer said:

If you're only 70 days into a 1 year fix and the penalty to transfer away is 90 days, then you'll lose the interest you're earned so far plus they'll deduct an amount equivalent to a further 20 days which means you'll get back less than you put in.

Actually not all ISA providers will do this.  Newcastle Building Society tell me they will not remove any funds actually credited to your account so in this example you would only lose the 70 days worth of interest and get back your original investment.  

refluxer

Reed_Richards said:

refluxer said:

If you're only 70 days into a 1 year fix and the penalty to transfer away is 90 days, then you'll lose the interest you're earned so far plus they'll deduct an amount equivalent to a further 20 days which means you'll get back less than you put in.

Actually not all ISA providers will do this.  Newcastle Building Society tell me they will not remove any funds actually credited to your account so in this example you would only lose the 70 days worth of interest and get back your original investment.  

It's strange they told you that because their ISA product page seems to contradict that info ?

From https://www.newcastle.co.uk/savings/cash-isas/newcastle-one-year-fixed-rate-isa-issue-63

Can I withdraw money?

Withdrawals/transfers are permitted. Withdrawals prior to maturity will be subject to 90 days loss of interest. If insufficient interest has been earned then the penalty will be taken from your capital. 

Albermarle

refluxer said:

Reed_Richards said:

refluxer said:

If you're only 70 days into a 1 year fix and the penalty to transfer away is 90 days, then you'll lose the interest you're earned so far plus they'll deduct an amount equivalent to a further 20 days which means you'll get back less than you put in.

Actually not all ISA providers will do this.  Newcastle Building Society tell me they will not remove any funds actually credited to your account so in this example you would only lose the 70 days worth of interest and get back your original investment.  

It's strange they told you that because their ISA product page seems to contradict that info ?

From https://www.newcastle.co.uk/savings/cash-isas/newcastle-one-year-fixed-rate-isa-issue-63

Can I withdraw money?

Withdrawals/transfers are permitted. Withdrawals prior to maturity will be subject to 90 days loss of interest. If insufficient interest has been earned then the penalty will be taken from your capital. 

It is not unheard of that call centre staff do not fully understand their own employers rules.