HSBC FR ISA Cashback

friolento

https://forums.moneysavingexpert.com/discussion/comment/82067080#Comment_82067080

Interest, whether from old or new ISA provider, does not count towards the annual £20k limit. Nor does the transferred amount.

Who told you that HSBC will not pay the interest into the ISA account? Nothing would surprise me any longer with HSBC, but even they would surely not do that?


EDIT: you are sort of correct, the interest does not get added to the FRISA - - mainly because once it's matured, it becomes a Loyalty Cash ISA, and interest is only paid at maturity. The interest for the FRISA therefore gets also paid into the Loyalty Cash ISA. How quickly or slowly this will happen is anyone's guess. It should all happen on the maturity day, or at least the calendar day after maturity.

It should be interesting to see how they handle transfers out which are requested to occur upon maturity. We could well find ourselves in another kafkaesque battle with HSBC over the transfers out. Which no doubt just about everybody will request once we have paid our penance ………………..

ccluedo

From their email to me:

"We will backdate interest owed to the date your funds credited HSBC. Please note this backdated interest will be credited into one of our internal accounts, not directly into your FRISA."

My understanding was based on a combination of the above, and as mentioned, from other people who have had backdated interest paid into their HSBC current account already.

Equally, I can see that email quote could well be a ref to content of your edit..but it doesn't explain those who have already received it. Time will tell I guess.

Rich2808

Surely any interest on transferred ISA funds should be paid into the ISA account transferred into - it might not be a huge sum but you can then earn interest on that interest tax free.

Have people really had this interest paid into their current accounts i.e. interest for period between when their funds arrived in the HSBC holding account and when they appeared in their ISA accounts which for some on here is a month or even two months interest which could be hundreds of pounds. Surely can't be so?

It is bad enough this shocking ISA transfer saga continues - without this on top?

Money_Stitch

Very briefly, similar saga from April to July. Formal complaint, held off FOS as still considering (you get 6 months to raise with FOS after final position from the bank is made).

Transfer finally complete. 150 compensation paid into current account. A second payment into current account representing the missed interest from day 16 of the transfer process to the day of completion of the transferred amount. This came from the complaints team, not CS.

Gone back to the complaint handler because I'm unsure if I should accept the interest payment into current account which takes it out of the ISA tax free wrapper, and will impact my savings tax PA for the year. It depends how they report it to HRMC. If 'compensation' not taxable, if they report as interest, then taxable. The deposits both say compensation. I also want written confirmation the cashback is marked on the account and will be received without chasing.

Still awaiting a reply. My concern over the interest backdate is that if I don't accept it now, it will be forgotten in month 13.

The worst experience I've ever had with an ISA having navigated virgin, trading 212 and building socities.

friolento

Paying any FRISA interest into a non-ISA account, and earlier than on maturity, is against HSBC’s ISA T&Cs. Unless you explicitly request it, I suppose, as part of your complaint settlement, but no such exception seems to mentioned in the T&Cs. I never would accept interest to be paid away from my ISA, as I want the ISA to grow as much as possible. I would also not give an inch to HSBC - they need to stick to their own T&Cs.

Having said this, if they pay you a bit of interest now marked as compensation, may be you will get the correct amount of interest added to your ISA at maturity, after all?

I believe we all have to check how much interest they will have credited at maturity, as we cannot trust HSBC that they will get it right.

Compensation for lost ISA interest should not be taxable (even if HSBC reported it as such). I am not even sure compensation payments get reported to HMRC.

ccluedo

https://forums.moneysavingexpert.com/discussion/comment/82065122#Comment_82065122

Both transfers have now completed.

Rich2808

https://forums.moneysavingexpert.com/discussion/comment/82067928#Comment_82067928

I have just noticed I got a credit to my HSBC current account of c£60 at the end of April - 5 days after the funds left my other provider but about 5 days (3 working days) before the transfer was credited to my HSBC isa. It just says 'HSBC current account credit'.

I didn't pick it up until now but this is roughly the interest I would have earned between the funds reaching HSBC and being paid into my ISA by them.

Could this be my interest for period it was in the holding account - even though it was paid several days before they moved it to the ISA? As long as they don't report it to HMRC as taxable savings interest I am not going to lose sleep over it - but can we be certain they won't?

It is only £60 for me but for others it could be hundreds of pounds as I only had to wait 10 days for the move from holding account to ISA but some people were waiting one or even two months.

This doesn't seem right to me at all - interest on ISA funds should be paid into your ISA if that is what you asked for when you set up the account!

ccluedo

Just a final update that now all my funds are in HSBC.  

Thankfully they went directly into ISA not into the abyss of a holding account.

Confirmed in writing that when my ISA matures the interest will be calculated from the agreed date of 15 working days after application date. Time will tell!

Received what seems to be the standard offering of £150 compensation which I accepted - mainly due to the extra interest received in the ceding accounts in the (many) weeks up to actual transfer date. In my case this adds up to an additional few hundred pounds. 
Also, tbh I'm happy to avoid the time and hassle of the Ombudsman, which, as time went on, is where I expected to end up!

As mentioned by me before and others on the thread(s), some people have had the back dated interest paid already into the current account.  I'm happy that mine is actually going into the ISA where it will compound as I've no current plans to withdraw. The "extra" interest whilst it was still in ceding accounts waiting for HSBC to get its act together is a "bonus" to the ISA which will also now compound. 

Even given the comp and extra interest, the whole experience is one I'd rather not repeat and HSBC would have to offer something very good next year for me to keep my money there. In a way, I'm hoping they do as I'm very much NOT looking forward to their (potential) transfer out inefficiecies!

Hopefully they have learned from this year and will be geared up for mass transfers out/ withdrawals next year. We can but hope!

flykiller

Hi

How long are people waiting while funds are in the holding account before they arrive in the FR ISA? I'm on day 20!

Cheers

friolento

it was 50 for me.