Santander Fixed rate ISAs

billn

Has anyone else with a Santander Fixed rate ISAs got an "upgrade" button with their account online, I had read a thread on this forum saying some had upgraded without penalty, I queried this with Santander they said no I would incure a penalty. I find it a bit missleading that the button is there.

refluxer

billn said:

Has anyone else with a Santander Fixed rate ISAs got an "upgrade" button with their account online, I had read a thread on this forum saying some had upgraded without penalty, I queried this with Santander they said no I would incure a penalty. I find it a bit missleading that the button is there.

Didn't that poster then go on to say that they'd subsequently been charged the usual penalty you'd expect for transferring before the maturity date ? Early transfer charges would normally apply whether a transfer is either internal or external, so you should always factor in the penalty if you want to do this.

The only exception I'm aware of is where certain providers increases their offered rates within the 14 day cool-down period and customers are allowed to switch internally from one fix to another (Virgin Money are re-known for this).

I have a Santander fixed rate ISA - there is an upgrade option within online banking but not within the app. I don't personally think this is misleading because I'm aware there would be a penalty for doing so. I haven't clicked on that option, but I would like to think they would give a warning if you went down that route.

billn

Thank you for your reply. I must admit I missed the later posts about being charged the penalty, but i still wonder about the upgrade button if there is going to be a penalty, it's hardly an upgrade.

I don't want to provoke an argument about this, I was interested to see if others had the same options.

Thanks again for your reply.

refluxer

billn said:

I still wonder about the upgrade button if there is going to be a penalty, it's hardly an upgrade.

Yes - you're right, although there are scenarios where switching from a fixed rate ISA with a low rate (before maturity) to one with a high rate can pay off in the long run, even with the penalty. 

I mainly use their app so wasn't actually aware of the 'upgrade' option before now but, having checked out the extra functionality in their online banking site, it's also present on another of my ISAs that was previously a fixed rate but has recently matured into an easy access ISA so I guess in that case, transferring from easy access (with low rate) to a fixed (higher) rate would be considered an upgrade and there would be no penalty.

I'm not necessarily trying to stick up for Santander here BTW - I'm just trying to think it through and, as I said, I would consider it extremely poor form if they didn't point out the penalty for getting out of a fixed rate account early when going down the 'upgrade' route.

subjecttocontract

Well my Santander fixed rate ISA ended on October 1st. They wrote to me telling me I could upgrade up to 28 days before maturity and the interest rate would change straight away. This was tempting as I was on 3.75% and their latest offering is 5.6%. THERE WAS NO MENTION of a penalty. I didn't take up the offer but agree if there is a penalty applied it's extremely misleading.

refluxer

subjecttocontract said:

Well my Santander fixed rate ISA ended on October 1st. They wrote to me telling me I could upgrade up to 28 days before maturity and the interest rate would change straight away. This was tempting as I was on 3.75% and their latest offering is 5.6%. THERE WAS NO MENTION of a penalty. I didn't take up the offer but agree if there is a penalty applied it's extremely misleading.

I've just checked back through my paperwork and you're right - it does say that. I think that makes Santander pretty unique in making such an offer - I've not come across that with maturing ISAs with other providers. 

The reason I'd not read the paperwork thoroughly is that I'd intended on transferring away, regardless. Their fixed rate ISAs this year have only been worth taking advantage of in conjunction with the £50 eVoucher offer (where funding by external transfer is needed) so I would have never transferred internally anyway, as higher rates are available elsewhere.

This could be worth knowing for the future though for anyone with a Santander fixed rate ISA, as it could allow someone to take advantage of a new fixed rate deal up a month early which could be advantageous as rates start to fall... presuming that (a) the Santander rate is competitive and (b) there isn't actually a penalty, like you say !

billn

subjecttocontract said:

Well my Santander fixed rate ISA ended on October 1st. They wrote to me telling me I could upgrade up to 28 days before maturity and the interest rate would change straight away. This was tempting as I was on 3.75% and their latest offering is 5.6%. THERE WAS NO MENTION of a penalty. I didn't take up the offer but agree if there is a penalty applied it's extremely misleading.

That's interesting and it would be good to hear from anybody that has taken up the offer, I still think it would be clearer if the upgrade button was only available when you could actually upgrade without penalty.

howryoo

I agree - looks good to be able to upgrade if no penalty was involved and would be interested to here from those who've upgraded within their fixed term.

If their systems are up to scratch, you'd imagine that if there was a penalty, it would warn you once you click the upgrade option (making you aware), before progressing forward with the upgrade.

35har1old

billn said:

Has anyone else with a Santander Fixed rate ISAs got an "upgrade" button with their account online, I had read a thread on this forum saying some had upgraded without penalty, I queried this with Santander they said no I would incure a penalty. I find it a bit missleading that the button is there.

I received a letter saying I could upgrade my fixed rate ISA 28 days in advance of maturity the change would take effect immediately and i could choose any ISA even instant access. I did upgrade to a instant excess ISA with no penalty  incured.Though the letter did not reach me until well within the 28 day period 

billn

35har1old said:

billn said:

Has anyone else with a Santander Fixed rate ISAs got an "upgrade" button with their account online, I had read a thread on this forum saying some had upgraded without penalty, I queried this with Santander they said no I would incure a penalty. I find it a bit missleading that the button is there.

I received a letter saying I could upgrade my fixed rate ISA 28 days in advance of maturity the change would take effect immediately and i could choose any ISA even instant access. I did upgrade to a instant excess ISA with no penalty  incured.Though the letter did not reach me until well within the 28 day period 

Thank you, my Fixed Rate has another year to run and the point of my OP was the upgrade button on the online site was misleading.

idb1979

subjecttocontract said:

Well my Santander fixed rate ISA ended on October 1st. They wrote to me telling me I could upgrade up to 28 days before maturity and the interest rate would change straight away. 

My Fixed Rate ISA matures on 1st November and I have yet to have any correspondence on my options. I have tried to speak to them on chat and by phone but have received very vague replies saying I "should receive details soon"