Renewing a maturing Barclays cash ISA to a new Barclays 1yr fixed term ISA - A cautionary tale

ploverman22

Three weeks before my Barclays ISA was due to mature I was invited to view my maturity options. 

Using the Barclays app. I selected a 1yr fixed rate Cash ISA product and ticked ‘transfer funds from existing ISA on maturity’. Simple, you would have thought BUT submitting the data immediately opened the new 1yr account which would not be funded for another three weeks thus loosing interest. Surely not unreasonable to assume the account would open on maturity?

I have never experienced this with any other financial institution where an internal transfer has been seamless on the day of maturity for the full period.

After a written complaint to Barclays which was upheld I was eventually refunded the amount of lost interest and compensation. Interestingly, my wife had the same problem but her complaint was dealt by a different investigator and dismissed but received a goodwill gesture!!

JGB1955

Sorry - can't work out where you've lost the interest.  Presumably interest continued to be paid on the maturing account up until the day of transfer?  Perhaps I'm being a bit dense....

Edit - are you saying that the 1 year ISA only, now, has 49 week until it matures?  

eskbanker

JGB1955 said:

Sorry - can't work out where you've lost the interest.  Presumably interest continued to be paid on the maturing account up until the day of transfer?  Perhaps I'm being a bit dense....

I think OP's point is that the one year fixed term starts three weeks before the account is funded, therefore it's effectively only a 49 week fix!  Obviously the money would be available for use in another account three weeks earlier this time next year, so that notional 'loss' could easily be recovered at that stage, although that would clearly depend on what rates are doing then....

ploverman22

eskbanker said:

JGB1955 said:

Sorry - can't work out where you've lost the interest.  Presumably interest continued to be paid on the maturing account up until the day of transfer?  Perhaps I'm being a bit dense....

I think OP's point is that the one year fixed term starts three weeks before the account is funded, therefore it's effectively only a 49 week fix!  Obviously the money would be available for use in another account three weeks earlier this time next year, so that notional 'loss' could easily be recovered at that stage, although that would clearly depend on what rates are doing then....

Thanks eskbanker, correct! When submitting my maturity instructions for a 1yr fixed rate Cash ISA back in December 2023 the rate was 5.3%. The rate for the same product is currently 4.7% and is likely to be lower still by the end of the year….