ISA Transfers-In delay - loss of interest?

Grumpy7Saver4

I'm transferring-in from easy access variable rate cash ISAs into a new fixed rate cash ISA.

Why does it take up to 15 days?

Why is there a lengthy 3 working day period when your money is not shown in either account?

Am I losing interest during that gap?  And which bank is gaining it?

Why doesn't the transfer use Fast-Pay?

masonic

A large proportion of cash ISA transfers are electronic now, but not every provider is signed up to The Cash ISA Transfer Service. If either provider is not, then it is required for the ISA transfer history document to be sent in the post. There is no secure messaging system built into Faster Payments. It therefore makes most sense to send everything together, meaning a cheque in the envelope.

You may or may not lose interest during the gap. Best practice is for the new provider to backdate interest to the date on the cheque. If there is an interest gap, neither bank is likely to be gaining it. The money needs to be available to draw on in their clearing account, so it cannot be used towards a mortgage or loan.

Albermarle

It is not just the same as faster payment from one bank account to another, as ISA rules/admin/paperwork has to be followed through correctly.
However if both providers are signed up to the electronic isa transfer system, it should only take a few days rather than fifteen.

For those of us of a certain age, we can remember when the system was properly slow, and we were pleased when the 15 working days target time was introduced as it speeded things up so much !

jak22

Even with a few days "delay" after maturity (some banks add some extra steps if you ask for the transfer to be delayed until maturity) the holding bank paid those days interest, and the actual funds transfer completed within a day using normal faster payments so there was no interest "loss" - 15 days is just a max limit guideline for the process, not really an expectation. Just watch out for the current bank maturing into a low interest rate holding account though.

hugbourne222

It seems to happen with fixed rate savings too - I transferred cash into a 2 year deal with Nat west on 22 10 24 and on 29th Oct 26 they messaged to say they had transferred it into a new 2 year deal without any advance notification although I knew it was soon to mature. I wanted to put the savings into an ISA so transferred the money out - I suffered the loss of 3 months interest as they said maturity was 7th November - 9 weeks after complaining I am just getting the stock reply “we are reviewing it and feel free to complain to the financial ombudsman” - 

eskbanker

hugbourne222 said:

It seems to happen with fixed rate savings too - I transferred cash into a 2 year deal with Nat west on 22 10 24 and on 29th Oct 26 they messaged to say they had transferred it into a new 2 year deal without any advance notification although I knew it was soon to mature. I wanted to put the savings into an ISA so transferred the money out - I suffered the loss of 3 months interest as they said maturity was 7th November - 9 weeks after complaining I am just getting the stock reply “we are reviewing it and feel free to complain to the financial ombudsman” - 

Although there's a superficial similarity between the subject of this thread and the 'interest loss' you refer to, your issue sounds more like the imposition of a withdrawal penalty (that happens to be expressed in terms of equivalence to interest) rather than actual interest shortfalls during direct ISA transfers, plus other grievances about rollover policies, lack of maturity notifications, confusion about dates, etc, so maybe worth starting a separate thread?

Ocelot

I received extra money following the transfer of 2 FR ISAs, presumably covering the 3 working days the transfer took.