Moneybox no return policy

Ian685

Hello all,

Looking for advice as to whether I should transfer out, despite the non-return clause.

I have a LISA (now 3.8%) and a cash ISA (now 4%) with Moneybox. Thier introduction boosted rates have weeded off and the accounts have had a slight drop in rates due the Bank of England dropping rates. 

I have just found out that Moneybox has a "no return" policy - if I transfer out i cannot return to them for the same product. 

I have managed to save a bit of money into these accounts over the years and see 4.8% is the leading market rate for both products. 

Transfer out? Or the rate change isn't significant, so don't worry? 

Thanks.

Alexland

I don't think it's worth putting up with 3.8% just because they might not have you back. Even if you couldn't find a Cash LISA provider that would take your account at a competitive rate you could always look at S&S LISA providers such as Dodl (4.84% on uninvested cash although haven't checked if they would still charge their 0.15% platform fee on cash) or maybe the main AJ Bell platform investing in a Money Market Fund which gives a similar rate of return to the best buy cash accounts with minimal risk and without the bother of keep moving the LISA around to get the best rate. You could even use Gilts to get a medium or long term fixed rate of return on the LISA if you really wanted. The LISA market might be small but there are still options. By the time you wanted to move back Moneybox may have updated their policy or systems to accept returning customers.

dcs34

Personally I took a view to ditch Moneybox, for a couple of reasons. Firstly they claim the 'no return' policy is due to technical limitations, so it's entirely possible they might change it in the future. Plus they seem to have a habit of making better offers to new customers than existing, and as a returning customer you wouldn't quality as an existing customer for their better rates in any case. Also as they were the market leader for a long stretch of time I suspect they won't be so diligent about keeping at the top of the rate charts in the future.

Ian685

It is interesting to see even within the limations of a LISA there is a small range. Thanks for challenging my mindset to seeing that it doesn't always have to be a pot of cash. I'll look into these options.

Yes... very true. Why would you want to return to a company who's competitive focus is only with new customers. 

It is a shame as I really do like their app.

I'm also expecting a rate change at some point in the future with Bank of England and would want to see how the market responds. Plus sometimes there is competition near to the new financial year.

Should anyone be reading this... moneybox doesn't allow partial transfers out.

amanda1024

Ian685 said:

Should anyone be reading this... moneybox doesn't allow partial transfers out.

They must have changed the policy then - I was going to say, I got around this by transferring out most but not all of my LISA.

I'm saving for retirement, so most of my LISA is now S&S since I've got a long way to go. If I was looking to buy a house in the nearer term I'd probably be keeping as cash; looks like Tembo currently have the best offer

Alexland

amanda1024 said:
I'm saving for retirement, so most of my LISA is now S&S since I've got a long way to go. If I was looking to buy a house in the nearer term I'd probably be keeping as cash; looks like Tembo currently have the best offer

It's not the S&S LISA that might be risky it's the investment you might choose.

For example Dodl's S&S LISA uninvested cash balance is just as safe as a Cash LISA because there is no investment it's just the ISA provider's cash interest rate.

If you buy a Gilt in a S&S LISA and hold it until maturity you get an exact known rate of return perhaps for a few years using debt issued by the UK treasury so arguably more secure than a Cash LISA where the customers money gets mixed up in a business although both are very safe due to FSCS protection but with a Gilt the asset is held in a nominee account and even the future returns are secured.

loau

Ian685 said:

moneybox doesn't allow partial transfers out.

Even for balances from previous tax years?