Opened Lloyds fixed cash ISA 13 days ago - higher rate now

morgmonster

After switching a current account to Lloyds to get the £150 incentive, I opened a 1 year fixed cash ISA with them on July 5th with an interest rate of 4.95%; it was funded solely with a transfer (£10,000) from last year's Santander cash ISA. I haven't contributed anything this tax year. Today I was browsing MSE and see the rate on the same product is now 5.45%. I'm a bit annoyed! I have sent a message to their probably idiotic chat bot to see if there's anything they can do and the bot said I'd hear back from a person; but does anyone know what the likely outcome would be if I closed the account under the 14 day cooling off rule? Would they convert it to their easy cash ISA and I could then switch to the higher rate fixed one?
I don't want to risk losing the ISA-ness of this money, but I'm worried that I'm on day 13 out of 14 and running out of time to speak to an actual person.

(I'm not going to continue chasing higher and higher rates, as we need the money in September 2024 to pay a lump off our mortgage before new rate kicks in, so any fix needs to start within the next couple of weeks at the latest, but it's a bit painful to see such a big jump in the same product so soon after opening, with no base rate change in the mean time!)

Bigwheels1111

Shame its not with Virgin, you can open a new ISA with them within the 14 cooling off period. Login, my account, New savings, ISA, Fund with old ISA.

All done.

Will be doing it Friday, So I can get 5.55%.

Then I can move again if rates rise before the BOE rate rise in 2 weeks.

Then I have 2 weeks after the rise if rates rise again.

Big Game, but I fixed a few weeks ago at 5.2% then 5.5% and now 5.55%, who knows what in 2/4 weeks.

morgmonster

Thanks. That's a good point. If they can convert it to an easy access ISA, instead of opening the 5.5% one straight away perhaps I'll wait as long as I can to see what happens after the next MPC meeting.
I have had a response from a real person but they just said as it's a fixed rate product I have to wait til the end of the fixed rate period. I've replied asking about what they will do with the money if I ask to close it today.

Zuzi

Do you have a branch near you? I was in a similar situation and went to the branch within 14 days and they closed it for me (I also then went on to open a better rate with them).

My ISA was still empty though, but as long as you are within the 14 days I don't think it should matter? Maybe they will find a way to convert it to the new rate ISA; I explained why I was closing and that I wouldn't be doing it if they could "move" me onto the new rate but it seemed that they can't do that...

morgmonster

Gah, well my bad. I didn't realise it had been opened on the 3rd July so I was too late anyway. I was looking at the date on the app which was 5th July, but that was the date the transfer came into Lloyds not the date the account was opened. I'll keep it where it is as the 90 day interest penalty would more than outweigh the increase in interest rates I'd be likely to get, barring an extreme rise next month...

Shedman

Have you double checked whether Lloyds 14 day cooling off period is from opening or from when first funds are deposited?  If latter then you might still be OK.  On the other hand if you're stuck with it then you can console yourself with the fact that on £10k its only £50 lost interest so not horrendous.