Maturing cash ISA over £85,000

soulsaver

Observations/Options:

Shawbrook's 4.11% (?) isn't the best 1yr rate around to stay there, but: 

W/d down to c£82k would keep you under the fscs limit even in the (unlikely event) they failed near the end of the term  - but you lose the tax shelter on c£5k. 

However, you can probably get 4.11%+ after BR tax using regular savers for the w/d amount - but it would be sensible to keep the tax shelter going forward.
However, if you'll not have the £20k for next FY, it'll go towards your ISA again in April '26? 

Otherwise it's a 2 step - full transfer out to an interim provider's Easy Access ISA, then partial to provider of your choice - even back to Shawb, if you like.

I haven't looked for the best interim provider rate but OTTOMH I know Lloyds EA Isa is flexible, allows partial transfers out and about as safe as it gets for the short time you'll be exceeding fscs - only 3.25% IIRC so GYFO and you'll not be there for long enough to make a diff. And note limited to 3 w/ds inc closure or rate drops

friolento

Beddie said:

As it's only couple of thousand above the £85,000 threshold, the easiest ways are to take the (tiny) risk or withdraw it and put into a saving account. Yes, you'll then be liable for tax on any interest, but that will only be a small sum.

That's only a fix for the current tax year. The problem will re-occur next year, etc etc. Best to bite the bullet.

Having said this, weren't we mean to get a £110k FSCS protection sometime soon, perhaps?

https://www.bbc.co.uk/news/articles/c62z32pyegyo

Ch1ll1Phlakes

friolento said:

Beddie said:

As it's only couple of thousand above the £85,000 threshold, the easiest ways are to take the (tiny) risk or withdraw it and put into a saving account. Yes, you'll then be liable for tax on any interest, but that will only be a small sum.

That's only a fix for the current tax year. The problem will re-occur next year, etc etc. Best to bite the bullet.

Having said this, weren't we mean to get a £110k FSCS protection sometime soon, perhaps?

https://www.bbc.co.uk/news/articles/c62z32pyegyo

Yeah there's no official timeline for this change though. It's question marked in for applying from 1st December but there's been no official comment that this will happen or even when it will be announced.

Yorkie1

I remember previous threads which said that you could only "open and operate" one cash ISA with Shawbrook in any one tax year. e.g. Shawbrook multiple ISA rules — MoneySavingExpert Forum

Might be worth double checking their current rules in case your plan is to fully transfer out, with the intention of opening a fresh ISA for a partial transfer back in.

akh43

I was in a similar position last year and I rang them up and they arranged for £60k of the maturing ISA to transfer into a new fixed rate ISA with them and the rest of the money stayed in the original ISA which on maturity changed to an EA ISA which I then transferred out to a new ISA elsewhere.  Might have lost a little interest when it dropped to an EA ISA but it was only there a couple of days.  I am not sure if you could still do this, but I always find them helpful on the phone.

RunsFromRobots

I've been looking at the Barclays transfer-in offer. 

I currently have easy access ISAs with Charter, Vanquis and Tembo and combined I think it would be possible for me to transfer £100k to get the £500 reward.

My concerns are:

• the FSCS protection
• being stuck at a low % rate (the Instant Cash ISA is 1.11%)
• whether I could do a partial transfer away from Barclays

What are your thoughts @akh43, @Yorkie1, @friolento, @soulsaver, @Beddie, @clairec666 ?

friolento

RunsFromRobots said:

I've been looking at the Barclays transfer-in offer. 

I currently have easy access ISAs with Charter, Vanquis and Tembo and combined I think it would be possible for me to transfer £100k to get the £500 reward.

My concerns are:

• the FSCS protection
• being stuck at a low % rate (the Instant Cash ISA is 1.11%)
• whether I could do a partial transfer away from Barclays

What are your thoughts @akh43, @Yorkie1, @friolento, @soulsaver, @Beddie, @clairec666 ?

Even for Premier customers, this doesn't sound a compelling deal from an interest-rate point of view. For 'normal' customers, it would be a bad deal as there are at least a dozen other providers offering better rates, with all the money going into the ISA (Barclays bonus money goes into a current account).

I would also not put more than £85k (incl forthcoming interest) into a single outfit.

winkowinko

Anything stopping you from transferring into the measly 1.11% instant ISA, and then immediately transferring out to another provider?

It says the bonus gets paid within 60 days, but no mention of how long the funds need to stay there for.

refluxer

RunsFromRobots said:

I've been looking at the Barclays transfer-in offer. 

I currently have easy access ISAs with Charter, Vanquis and Tembo and combined I think it would be possible for me to transfer £100k to get the £500 reward.

My concerns are:

• the FSCS protection
• being stuck at a low % rate (the Instant Cash ISA is 1.11%)
• whether I could do a partial transfer away from Barclays

Yes, anything over £85k (including any interest due but not yet credited) won't be covered by FSCS protection.

That's an interesting offer - I had a quick read through the terms and I may be wrong but I couldn't see a requirement to even keep the transferred funds in the ISA for any specified length of time (not even to the end of the offer period). This seems too good to be true but if that's the case, then I'm surprised the offer isn't limited to their fixed term ISAs, as you'd obviously be able to transfer straight back out of an easy access ISA without penalty. 

Careful scrutinisation of those terms is needed to avoid any costly mistakes, I think.

drphila

winkowinko said:

Anything stopping you from transferring into the measly 1.11% instant ISA, and then immediately transferring out to another provider?

They may try to invoke this clause (my bold):

"You will not be able to benefit from this Offer if we reasonably believe that you have acted fraudulently or misleadingly or have sought to abuse the Offer".