Plum being scammy..?

Uriziel

I stupidly opened a Plum ISA for the high interest rate thinking I can move my ISA after 3 months however I have now read further and apparently they do not pay your interest at the start of each month but instead they pay it at the end of the following month and if you move your money your interest voids. Furthermore you receive your bonus interest rate after an entire year so you cannot join for only 3 months for the higher rate and then leave.

I have never seen any savings account that makes you wait an entire month for your interest and just keeps it if you move the money. Is this actually legal?

masonic

There is conflicting information on MSE about this. However, the bonus is actually paid after 3 months, not 12. Once paid, you should be able to leave, only forfeiting interest for the part of the month in which your transfer takes place. It is unclear how the interest for the previous full month is paid, but presumably it is credited upon closure. So you will lose up to a couple of weeks of interest at the lower rate depending on your timings.

See worked example here: https://forums.moneysavingexpert.com/discussion/comment/81386791/#Comment_81386791

It is a very bizarre practice to credit interest one full month in arrears, and hard to imagine what cashflows led them to do this.

Stolas

I’m not sure about the question of legality. However it would be worth checking if the account has a cooling off period.  

masonic

Stolas said:

I’m not sure about the question of legality. However it would be worth checking if the account has a cooling off period.  

There is a standard 14 day cooling off period. However, all interest earned will be lost.

Uriziel

Stolas said:

I’m not sure about the question of legality. However it would be worth checking if the account has a cooling off period.  

Do I need to care about a cooling off period? Can I not just transfer the ISA? I already created a Tembo account but apparently their transfer service is deactivated due to demand.

Uriziel

masonic said:

There is conflicting information on MSE about this. However, the bonus is actually paid after 3 months, not 12. Once paid, you should be able to leave, only forfeiting interest for the part of the month in which your transfer takes place. It is unclear how the interest for the previous full month is paid, but presumably it is credited upon closure. So you will lose up to a couple of weeks of interest at the lower rate depending on your timings.

See worked example here: https://forums.moneysavingexpert.com/discussion/comment/81386791/#Comment_81386791

It is a very bizarre practice to credit interest one full month in arrears, and hard to imagine what cashflows led them to do this.

This is clearly outlined on their website.
https://help.withplum.com/en/articles/8998839-cash-isa-interest-calculation

masonic

Uriziel said:

masonic said:

There is conflicting information on MSE about this. However, the bonus is actually paid after 3 months, not 12. Once paid, you should be able to leave, only forfeiting interest for the part of the month in which your transfer takes place. It is unclear how the interest for the previous full month is paid, but presumably it is credited upon closure. So you will lose up to a couple of weeks of interest at the lower rate depending on your timings.

See worked example here: https://forums.moneysavingexpert.com/discussion/comment/81386791/#Comment_81386791

It is a very bizarre practice to credit interest one full month in arrears, and hard to imagine what cashflows led them to do this.

This is clearly outlined on their website.
https://help.withplum.com/en/articles/8998839-cash-isa-interest-calculation

From 4 months ago when this offer did not exist, so it refers to a previous 12 month bonus rate offer. The interest rate is a bit of a giveaway, being over 1% lower.

Suggest you navigate here, scroll down to the FAQ, expand the "What's the Plum Cash ISA interest rate?" and read the sentence that starts "Earnings from the Plum Bonus rate are paid..."

Alternatively, open the app, open up your Cash ISA, scroll down to the accrued interest section and read it there.

winkowinko

Uriziel said:

Stolas said:

I’m not sure about the question of legality. However it would be worth checking if the account has a cooling off period.  

Do I need to care about a cooling off period? Can I not just transfer the ISA? I already created a Tembo account but apparently their transfer service is deactivated due to demand.

It depends on how much you put in or plan to put in during the 25/26 tax year.

Although if you have a cooling off period, you should still be able to deposit up to 20k elsewhere for this tax year.

elsien

There’s nothing “scammy” about terms and conditions available in advance, where you can choose to go ahead with the transaction, or not, once you have read them. 

slinger2

elsien said:

There’s nothing “scammy” about terms and conditions available in advance, where you can choose to go ahead with the transaction, or not, once you have read them. 

Is that true nowadays? T&Cs need to be fair and transparent don't they?

elsien

They do. But if you read them, see that they unfair and not transparent and then go ahead anyway there has be a certain degree of personal responsibility.