Cash ISA Interest paid by cheque!

boingy

I find it really odd that they offered the option to have the interest paid outside of a fixed ISA, and getting it paid by cheque is doubly odd. I suppose you might be wanting an income from the ISA but all the fixes I've ever used gave you no choice. The fixed period ends then the interest for that period is added then the whole lot "matures" in some way, typically into an easy access ISA.

But, yes, many apps allow you to pay in cheques electronically. Take a pic of the front and the (blank!) back and they process it as if they had it in their hands (or complain about the poor photo...)

ColdIron

Fixes often allow you to take monthly interest. Fixed for the highest rate and income, perhaps to help pay the bills. There isn't much point in monthly interest over annual if you just keep it in the ISA, same AER

Barclays even offer fixes that allow you to withdraw some of the original sum (with restrictions). Now that is unusual

https://www.barclays.co.uk/savings/bonds/flexible-bond

DopeyDylanH

refluxer said:

la531983 said:

Also, no financial loss has been incurred (or has it?), yes slightly inconvenient getting a cheque but thats all it is, slightly inconvenient, just bank it using a banking app and no visit to a branch is needed.

If the OP didn't need the monthly interest paid away as income then they'll have lost out financially in a couple of ways - the interest won't have been allowed to compound within the account (so they'll have only achieved the gross monthly rate rather than the stated AER) and the amount of savings shielded from tax won't have been allowed to grow within the ISA, which is desired when not needing the interest as income.

While all is not lost in terms of the latter issue in that you can obviously pay that back into an ISA during the next tax year, it'll probably take a big chunk out of next year's allowance.

Couldn't have worded it better, thanks for your feedback

I didn't want it paid away, and the only question posed at the time was 'Annual or Monthly?', not 'paid in or paid away?'.

DopeyDylanH

refluxer said:

ColdIron said:

refluxer said:

la531983 said:

Also, no financial loss has been incurred (or has it?), yes slightly inconvenient getting a cheque but thats all it is, slightly inconvenient, just bank it using a banking app and no visit to a branch is needed.

If the OP didn't need the monthly interest paid away as income then they'll have lost out financially in a couple of ways

And yet the OP elected to choose monthly over annual interest

DopeyDylanH said:

I did select monthly interest

That it was paid by cheque doesn't negate those advantages that they would miss out on anyway any more than if it had been moved electronically. It would seem to me that they are no worse off financially beyond the inconvenience of cashing that cheque

They chose monthly interest not realising that it would be paid away when they actually wanted it paying into the account... at least judging by the original post.  

"I was just wondering if any of you had ever heard of the concept of a Cash ISA paying out its interest via cheque.  All my ISA's have just paid straight back into the ISA, keeping the interest tax free."

I'm not sure why they're fixating on the cheque aspect because presumably the interest being paid away electronically would still not have been the desired result either.

Bang on again.  I suppose 'cheque' was heavily in my question, but that was to help me understand if I'd just missed something obvious.

DopeyDylanH

ColdIron said:

DopeyDylanH said:

la531983 said:

Also, no financial loss has been incurred (or has it?), yes slightly inconvenient getting a cheque but thats all it is, slightly inconvenient, just bank it using a banking app and no visit to a branch is needed.

This is interesting.  It's possible to bank a cheque via an app?  Please tell me more, as I've genuinely never heard of this.  Before Barclay's I think the last cheque I received was in my teens (I'm over 50 now).

Yes

https://www.barclays.co.uk/ways-to-bank/mobile-banking-services/paying-in-a-cheque/

It may not help you directly as you appear not to have a Barclays account, but many other banks, perhaps including the one you have, will allow this

Thanks for that, I never knew.  I've even just quoted it to the ombudsman as a possible suggestion Barclay's could've offered all those months ago.

DopeyDylanH

refluxer said:

DopeyDylanH said:
 My original question still remains.

To answer that question, yes - it is very unusual for a bank to pay monthly interest out in the form of a cheque these days but Barclays only did that because you didn't have a suitable Barclays current or savings account to pay it into, as it says in the account T&Cs. If you did have one, it would have been paid electronically into that.

Essentially, you ended up (unwittingly) putting yourself in an unusual situation where receiving the interest by cheque was the only option.

I did have one Barclay's account they could pay it into though, but that was the ISA itself, the only place I ever wanted it to go!  If only my adviser had mentioned that, or I'd managed to open the current account and ISA using the Barclays App only to be refused for reasons the adviser put down to using my driving license rather than passport during the sign up process.  If it doesn't work with one or the other, take it out of the app!

35har1old

la531983 said:

DopeyDylanH said:

Consumerist said:

On the face of it, a little strange. It might be better to take this up directly with Barclays.

Thanks. I have done that and I've asked the ombudsman to look into it, as I thought it should have been pointed out while I was face to face with the specialist adviser.

Sorry, you have jumped straight to the Ombudsman before getting any sort of meaningful reply from the bank first? 

Anyway, seems someone has provided a link above.

It usually takes a final letter  from Barclays or a period of time to have passed before the Ombudsman wil l get involved

35har1old

DopeyDylanH said:

refluxer said:

Did you select monthly interest ? Monthly interest on a Barclays Flexible (fixed term) Cash ISA can only be paid away and if you don't have a suitable Barclays account for it to be paid into, then it's paid away by cheque.

This is mentioned under 'What is the interest rate ?' which is the first box on the account summary document (T&Cs).

I did select monthly interest, but it wasn't explained by the specialist adviser setting it up that such a silly option was even a thing!  I was hoping to find out whether I was being thick, or this is the only ISA to have such a backward way of receiving interest.  The ISA has matured now, and I'll never bank with Barclay's again.

You selected monthly interest so you waited until it matured before raising a complaint 

DopeyDylanH

35har1old said:

DopeyDylanH said:

refluxer said:

Did you select monthly interest ? Monthly interest on a Barclays Flexible (fixed term) Cash ISA can only be paid away and if you don't have a suitable Barclays account for it to be paid into, then it's paid away by cheque.

This is mentioned under 'What is the interest rate ?' which is the first box on the account summary document (T&Cs).

I did select monthly interest, but it wasn't explained by the specialist adviser setting it up that such a silly option was even a thing!  I was hoping to find out whether I was being thick, or this is the only ISA to have such a backward way of receiving interest.  The ISA has matured now, and I'll never bank with Barclay's again.

You selected monthly interest so you waited until it matured before raising a complaint 

No,

I started my complaint from before even opening my ISA actually!

DopeyDylanH

35har1old said:

It usually takes a final letter  from Barclays or a period of time to have passed before the Ombudsman wil l get involved

Yep, they took pretty much the entire 6 months to get nowhere on my complaints, and even when reaching deadlock the letter didn't make it clear that it was deadlock/their final decision.

My original question was not about the ombudsman though, it was about whether cheques are sent for any other ISA not with Barclays.