YBS Fixed Rate ISA gotcha

crapweasel

tl;dr - I can no longer deposit into my ISA after only having it a month or so, and I should have read the ts and cs. 

This is just a warning to anyone looking at YBS fixed rate isa's. I took one out in November and then set up a standing order to pay a monthly sum. 
This was fine for December but in January my payment got returned.

I gave them a ring and basically what had happened is that the ISA product I took out had been withdrawn and therefore no more deposits were allowed. After a lot of moaning from me I begrudgingly accepted that yes, it does say this in the t's and c's (which I hadn't read properly)

Now, I would have expected any fixed-rate savings account, unless it specifically says that deposits are allowed for the first 30 days or whatever, to allow deposits for the full year, but not in this case. So now I can't get the cash isa benefits for the next 4 months until I can take out another one.

Personally, I think this is honky practice, curious as to what other people think.

BoGoF

I'm not a YBS but I didn't have to look very far to find the part that says deposits are allowed until the product is withdrawn. Its not like it's hidden in pages of t&c's it's i  the 'more information' that people should be reading anyway.

Sorry, not with you on this one

crapweasel

Yeah I guess. It's just the fact that it could also have been withdrawn a day after I took it out. No warning or anything.

mebu60

Fixed rates usually have a funding window for deposits. This is standard practice, nothing 'honky' about it at all. It will be clearly shown in various places during the application. An open-ended fixed rate product would hardly be a sensible thing to offer, particularly in the current climate of expected rate reductions. 

refluxer

crapweasel said:

Now, I would have expected any fixed-rate savings account, unless it specifically says that deposits are allowed for the first 30 days or whatever, to allow deposits for the full year, but not in this case. So now I can't get the cash isa benefits for the next 4 months until I can take out another one.

Personally, I think this is honky practice, curious as to what other people think.

It's actually normal practice for fixed rate bonds to have a limited funding window - in fact, I'm not sure I've ever come across a normal fixed rate (non-ISA, non-regular saver) bond that didn't have one.

In allowing subscriptions throughout the duration of the term of their fixed rate ISAs (or until the product is withdrawn), YBS are among only a handful of providers who offer this (Barclays and Shawbrook spring to mind) - the over-whelming majority don't.

Fortunately, in the case of cash ISAs at least, this won't be an issue once the ISA rules change in April because you'll be able to pay new subscriptions into more than one cash ISA during any one tax year from the next tax year onwards.

crapweasel

refluxer said:

Fortunately, in the case of cash ISAs at least, this won't be an issue once the ISA rules change in April because you'll be able to pay new subscriptions into more than one cash ISA during any one tax year from the next tax year onwards.

This is good to know. Thanks

soulsaver

Lloyds have(had this FY) a fixed 1 year ISA that you can pay into throughout the term -'upto the ISA annual allowance' but you can transfer in as well.

Not too exciting now though as there's only a few months left.