Maturing ISA transfer issue

fiddlesticks0

Hi, I have a cash ISA maturing in around 2 weeks time - I've done plenty of transfers before but not come across these issues before:

- the maturing ISAs I've had previously would move into an easy-access ISA if no other option were selected - this one however defaults to moving into a new 1 year fixed ISA, on a poor IR, so that's no good. There seems to be an option of having to apply for their easy-access (again poor IR) and selecting the existing isa to move to that, but it seems a bit of a hassle doing that when I'm going to transfer it out asap.

- looking at opening the Moneybox 4.47 Easy-Access (3 withdrawals per year) cash ISA (I've used Trading 212 previously so its bonus rate is unavailable, so Moneybox seems the next-best IR) - transfers in are allowed but their FAQ page says:

'If you’re looking to transfer in an existing ISA from another provider which has a maturity date, it’s best to wait until this has matured before starting a transfer in. This is because providers are typically unable to hold your transfer until your maturity date and may reject the transfer request or apply for an early closure penalty.'

Again, this is something I've never seen before - it's always been a case of stating the maturity date and selecting 'don't transfer until maturity' to organise the transfer ahead of time (esp given the 15 working days or so it takes to transfer).

I don't think any changes in the budget is going to make a difference to my plans either way, especially as I'll be moving to an easy-access ISA for the time being. So I'd rather not wait until after maturity, especially given the strange situation with the existing ISA defaulting to reinvestment in a fix. Any ideas?

Albermarle

There seems to be an option of having to apply for their easy-access (again poor IR) and selecting the existing isa to move to that, but it seems a bit of a hassle doing that when I'm going to transfer it out asap.

There is always a possibility that a transfer of a maturing fixed rate does not go ahead as planned, so doing it the above way is the safest way, although strictly should not be necessary.

Again, this is something I've never seen before - it's always been a case of stating the maturity date and selecting 'don't transfer until maturity' to organise the transfer ahead of time (esp given the 15 working days or so it takes to transfer).

Yes that is the normal way, but it seems Moneybox also want to 'play it safe' and avoid any post transfer complaints.

flaneurs_lobster

I'd be minded to give the "wait until matured" instructions, notwithstanding Moneybox's warning, do MB actually give this as an option or just a date?

The default Fixed ISA should have a cooling-off period (please make sure this is true) that will allow you to back out without penalty if the xfer to MB doesn't happen. Does (of course) mean that you will need to monitor the process rather than "fire'n'forget".

fiddlesticks0

Albermarle said:

There seems to be an option of having to apply for their easy-access (again poor IR) and selecting the existing isa to move to that, but it seems a bit of a hassle doing that when I'm going to transfer it out asap.

There is always a possibility that a transfer of a maturing fixed rate does not go ahead as planned, so doing it the above way is the safest way, although strictly should not be necessary.

Again, this is something I've never seen before - it's always been a case of stating the maturity date and selecting 'don't transfer until maturity' to organise the transfer ahead of time (esp given the 15 working days or so it takes to transfer).

Yes that is the normal way, but it seems Moneybox also want to 'play it safe' and avoid any post transfer complaints.

Thanks - I was hoping to sort this out one way or another in advance as there's the possibility the budget could presumably result in a deluge of new ISAs being opened if the allowance is to drop from next year - so the already slow process of opening/transferring/chasing transfers may be effected by that.

fiddlesticks0

flaneurs_lobster said:

I'd be minded to give the "wait until matured" instructions, notwithstanding Moneybox's warning, do MB actually give this as an option or just a date?

The default Fixed ISA should have a cooling-off period (please make sure this is true) that will allow you to back out without penalty if the xfer to MB doesn't happen. Does (of course) mean that you will need to monitor the process rather than "fire'n'forget".

Thanks - I don't know exactly how the Moneybox transfer works as I'm just looking at options - I don't think it shows the details until getting into the application process.

I was going to check re the cooling off - thanks for the reminder.

refluxer

fiddlesticks0 said:

Hi, I have a cash ISA maturing in around 2 weeks time - I've done plenty of transfers before but not come across these issues before:

- the maturing ISAs I've had previously would move into an easy-access ISA if no other option were selected - this one however defaults to moving into a new 1 year fixed ISA, on a poor IR, so that's no good. There seems to be an option of having to apply for their easy-access (again poor IR) and selecting the existing isa to move to that, but it seems a bit of a hassle doing that when I'm going to transfer it out asap.

Allowing a fixed rate ISA to mature by default (or requesting a transfer) into an easy access/maturity ISA with the same provider and then arranging the subsequent transfer from there once that has taken place is the process I've used with every fixed rate ISA I've taken out. While this isn't technically necessary, this cautious approach has meant that I've never had a problem with an ISA transfer to date. 

An internal transfer of fixed rate to easy access is no hassle at all really (either for you or them) and would normally happen instantaneously on the day of maturity. Once the account details have updated, then you can kick off the subsequent transfer.

The downside to this is that you may lose out on a better interest rate for a short time but if you're using ISA providers who both transfer electronically, this could be as little as 1-2 days.

fiddlesticks0 said:

- looking at opening the Moneybox 4.47 Easy-Access (3 withdrawals per year) cash ISA (I've used Trading 212 previously so its bonus rate is unavailable, so Moneybox seems the next-best IR) - transfers in are allowed but their FAQ page says:

'If you’re looking to transfer in an existing ISA from another provider which has a maturity date, it’s best to wait until this has matured before starting a transfer in. This is because providers are typically unable to hold your transfer until your maturity date and may reject the transfer request or apply for an early closure penalty.'

It's rare for an ISA provider to state this so if Moneybox are, I would definitely heed the warning ! 

molerat

I am in the process of transferring 4 ISAs and recently transferred another 2.  All the transfer in forms had the "give the necessary notice" option which tells the losing organisation to wait.  This has been successful with all 4 of the fixed term ISAs concerned.  One is an automatic renewal, Kent Reliance, but their maturity pack had options to not renew including a "will be transferring out" tick box although they notified me they had received a transfer request and were holding until maturity date before they received the maturity choice form - which they have since confirmed receipt of.

fiddlesticks0

molerat said:

I am in the process of transferring 4 ISAs and recently transferred another 2.  All the transfer in forms had the "give the necessary notice" option which tells the losing organisation to wait.  This has been successful with all 4 of the fixed term ISAs concerned.  One is an automatic renewal, Kent Reliance, but their maturity pack had options to not renew including a "will be transferring out" tick box although they notified me they had received a transfer request and were holding until maturity date before they received the maturity choice form - which they have since confirmed receipt of.

I'm pretty sure the Moneybox blurb mentioned they don't use transfer forms (which I've always had to do previously) - I don't know if that explains why the transfer can't be requested in advance of maturity as it's all done in the app, and everything must be good to go.

molerat

A couple were on line and had the relevant tick box.

fiddlesticks0

molerat said:

A couple were on line and had the relevant tick box.

Ok, thanks. I'm not sure if/why Moneybox don't do that but their blurbs says 'If you’re looking to transfer in an existing ISA from another provider which has a maturity date, it’s best to wait until this has matured before starting a transfer in. This is because providers are typically unable to hold your transfer until your maturity date and may reject the transfer request or apply for an early closure penalty.'
As someone mentioned previously, if that's what they're suggesting I wouldn't risk putting in a transfer request with them in advance.