moving cash isa to Chip - current provider not listed

JuicyBrat

Hi there

I'm a newbie writing on the forum (although I have enjoyed reading/following a number of threads on a number of different topics). I’m also a newbie to ISA’s and am looking for advice. I have an Easy Access Cash ISA Issue 43 with Charter with a balance of £16,000. I recently received an email from them letting me know that the interest rate is changing (4.96% down to 4.48%) on 30.07.2024. I also have an EACISA with Chip, however, in terms of transfers in, Charter isn’t on Chip’s list of providers so this is not an option. I’ve looked through the ISA list on MSE and Moneyfacts and honestly feel overwhelmed with all the choices. I would greatly appreciate it if anyone can assist with narrowing things down for me. TIA

JuicyBrat

 JuicyBrat said: Edit: My Chip ISA has a balance of £1000

Hi there

I'm a newbie writing on the forum (although I have enjoyed reading/following a number of threads on a number of different topics). I’m also a newbie to ISA’s and am looking for advice. I have an Easy Access Cash ISA Issue 43 with Charter with a balance of £16,000. I recently received an email from them letting me know that the interest rate is changing (4.96% down to 4.48%) on 30.07.2024. I also have an EACISA with Chip, however, in terms of transfers in, Charter isn’t on Chip’s list of providers so this is not an option. I’ve looked through the ISA list on MSE and Moneyfacts and honestly feel overwhelmed with all the choices. I would greatly appreciate it if anyone can assist with narrowing things down for me. TIA

refluxer

I'm surprised that Chip don't allow transfers in from Charter, as Charter use the BACs ISA transfer service so transfers-in would be electronic, which usually suits the app-only banks.

If transferring to Chip isn't an option, then you'll just have to work your way down the list and find an account that suits your needs from a provider you'll be happy dealing with.

Trading 212 and Plum have slightly higher EA ISA rates than Chip, but they both have their quirks. Plum actually have a lower rate for transferred sums so wouldn't be suitable anyway.

The rate for Zopa's Smart ISA isn't far behind Chip's. I've had their Smart Saver account for years and opened a fixed rate cash ISA pot with them last year and haven't had any issues. That was with last year's allowance though, so I don't have any experience of transferring in.

Do you actually need access to these ISA funds ? The base rate is predicted to fall at the next BoE meeting, so you could consider a fixed rate ISA if you wanted to lock in current rates and didn't need access.

JuicyBrat

Thanks so much @refluxer...Charter isn't on Chip's current list of providers, however, it may be they will consider adding them at a later time.

To answer your question, I would like access to some of the ISA funds, approx £5000 (this is more to do with lack of confidence in tying up savings longterm). Charter have suggested transfer to a 1 yr fixed rate ISA (4.86%) which I believe has no withdrawals although I'll need to double check.

You have raised some good points and it has given me some things to think about including the BoE meeting so I'll factor that in when considering what to do next...again thanks 0:)

refluxer

You should realty only put money into a fixed rate savings account that you know you won't need access to during the fixed rate period.

Fixed rate ISAs do differ from normal fixed rate savings accounts in that you can access the money if you decide you need to, however you'll have to pay a fairly hefty interest penalty for doing so (eg. 3 months-worth of interest on a 1 year fix). This can potentially see you getting less back than you put in, because the penalty can be taken from the original deposit amount if necessary (eg. you withdraw after 2 months and the penalty is 3 months).

JuicyBrat

Ahh, yes I see what you mean. I only have until the 30th July then Charter will automatically downgrade my account so I’ll need to make my mind up pretty quick! 

JuicyBrat

In case anyone’s interested, I emailed Chip (25.07.2024) to ask whether they had any plans to add Charter to their list of providers. They finally responded (29th) below:

Hi there, 

​

​TThank you for reaching out to us and my apologies for the delay in getting back to you. Unfortunately, at this time there are no plans to onboard Charter with our ISA transfer feature due to incompatible technologies between the two companies. 

​

I am sorry for any inconvenience that this may cause you. 

​

If you have any further questions, please let me know.

Needless to say I’m not impressed with the length of time it took for them to respond. My Charter CISA interest rate has now been reduced. However, I might stay with them as their customer service is top tier.

Albermarle

You are aware of course that you could transfer and then find the new EA ISA drops its rates, so making the exercise a waste of time.
Might be better to sit tight and see what the BoE interest rate drop announced today does to the savings market.
A loss of 0.5% interest for a couple of months will only cost you about £15 anyway.

JuicyBrat

Ahh thanks @albemarle...yes I was aware and you're absolutely right. It did cross my mind the effort I'd be putting in to try and move it (for very little gain) might not actually be worth it as BoE rates are likely to (and did) drop today. 

Albermarle

JuicyBrat said:

Ahh thanks @albemarle...yes I was aware and you're absolutely right. It did cross my mind the effort I'd be putting in to try and move it (for very little gain) might not actually be worth it as BoE rates are likely to (and did) drop today. 

The unpredictable part is how each savings provider reacts to Bof E rate changes. Some will have pre-empted it, some will change now, and some will stay the same.
Each provider is driven by how much money they need coming in from savers ( to lend out again), so they will not necessarily follow BoE changes slavishly, but obviously it does set a trend.

JuicyBrat

This information is super helpful, thanks @Albermarle. For me, it means I don't have to feel pressured to move/keep my savings with one provider over another as everything's unpredictable. Despite Charter reducing their rate (AER down from 5.7% to 4.57%) and them not having an app, I do like their customer service and feel comfortable with them for now. However, I will keep an eye on what's happening in the market.