Cash ISA Transfer penalties after Fixed Term ends?

elwy

Can anyone please clarify what I'm reading in the product T&Cs for Fixed Term Cash ISAs.

e.g. Paragon Bank 2 year Fixed Term:
"8. Withdrawals can be made subject to 180 days’ loss of interest on the amount withdrawn. If you have not earned sufficient interest then the penalty will be taken from your capital. Closure of your account or transfers to another account with Paragon, or another provider, are classed as withdrawals."

e.g. Santander Fixed Rate ISA:
"ISA transfers: You can transfer the full balance of your ISA to another provider at any time, a charge equivalent to 120 days’ interest will be applied. You will need to contact your new ISA provider to arrange the transfer"

I am taking both of these conditions to mean that the same transfer charges apply if you transfer out either before or after the fixed term has ended, since I can't see any reference to the fixed term in these clauses.  This would mean there is no greater penalty for withdrawing during the fixed term than at any other time.

Am I interpreting these correctly?  I had always assumed this was not the case and transfer penalties only applied during the fixed term.

Thanks

Albermarle

 I had always assumed this was not the case and transfer penalties only applied during the fixed term.

Yes this is the case. Once the fixed term ends the account is closed, so you can not transfer or withdraw from it as such. Obviously you can then withdraw or transfer the money with no penalties as the fixed term has ended , so the conditions you quote no longer apply.

masonic

As above, those accounts will mature into different accounts with different T&Cs. What happens at maturity should be covered these accounts' T&Cs.

refluxer

To add to what Albermarle said above, it's always good to check what happens to the account at the end of the fixed rate period, just in case you forget to submit your maturity instructions or there is a last-minute problem with doing so.

If you miss the deadline, then most fixed rate ISAs will default to a maturity/easy access ISA in which case the withdrawal penalties stated for the previous fixed term no longer apply but, in some cases, the default will be for the money to be put back into another similar fixed rate product, in which case they will continue to apply.

I've got/had fixed rate cash ISAs with both Paragon and Santander and the default for both of those was easy access, but you would need to check the T&Cs for the specific products in question. Ford Money are one bank I know of that will put the money back into another fixed rate account and there may be others.

elwy

Many thanks for the clarifications, that makes a lot more sense!

MACKEM99

elwy said:

Many thanks for the clarifications, that makes a lot more sense!

What are you trying to do with the money?