Nominated account.

BernieMoney

Anyone else had experience of the default nominated account when applying for a new ISA? Recently my wife and I have both applied for new ISAs, online the application asks for a nominated account where the annual interest should be paid. We wanted the annual interest to be paid into our nominated bank accounts. On every ISA opened we've had to change the destination account from paying the interest back into the ISA to having it paid into our nominated bank account. We missed one, consequently the interest was paid into the ISA account and will be locked in for the duration. A little underhand me thinks.

eskbanker

If you're saying that within the application process you specified that interest was to be paid out to an external account but the provider didn't honour this, then that's cause for a formal complaint.  Which ISA provider is this?

mebu60

BernieMoney said:

Anyone else had experience of the default nominated account when applying for a new ISA? Recently my wife and I have both applied for new ISAs, online the application asks for a nominated account where the annual interest should be paid. We wanted the annual interest to be paid into our nominated bank accounts. On every ISA opened we've had to change the destination account from paying the interest back into the ISA to having it paid into our nominated bank account. We missed one, consequently the interest was paid into the ISA account and will be locked in for the duration. A little underhand me thinks.

Not the provider's fault then! The default makes sense as I expect the majority have interest paid into the same account rather than paid away, even more so in the case of ISAs as paying away to a current account loses the protection of the tax wrapper. Providers would no doubt be slaughtered if they set a default that didn't continue the tax efficient arrangement.