Open new and transfer from old ISA within provider

whitevanandy

I have a flexible variable cash isa with Tembo which is now at 3.8%. There new isa pays 4.3 so I wanted to open new and transfer full balance into it. The old isa would then close. They say I can’t because you can’t have two isa’s with same provider. Are they right? I know there maybe better options elsewhere but I’m getting a mortgage through them and there are no fees because I have the isa.

masonic

Providers are allowed to limit customers to a single ISA with themselves but cannot prevent you opening other ISAs elsewhere.

I suspect the actual restriction is on existing customers having the new promotional rate.

Do you need to keep the full balance with Tembo for your mortgage deal?

whitevanandy

I understand what you’re saying, thanks. I’ll enquire about the qualifying balance because I have two years worth of allowance in the ISA now. When they mentioned it originally they just said it was because I had the ISA. No mention of the amount.

friolento

They seem to only allow internal transfers from an easy access to a fixed rate one. Their systems appear to be unable to support more than one ISA of the same type. They are entitled to have this unfriendly limitation.

Can you transfer your ISA, e.g. to Vanquis who have a 3 access 4.3% one, and then back to Tembo for your mortgage deal?

scratch this, as the Tembo 4.3% easy access doesn’t accept transfers in. Your only potential option would be a fixed rate Tembo ISA, which may or may not be a viable option. How much do you have to have in a Tembo ISA to qualify for the mortgage deal?

whitevanandy

I’ve checked their site and to qualify for zero mortgage fees I only need an active cash ISA, minimum £500 balance. My thoughts are to move the minimum to their fix and transfer the rest to a better provider

friolento

That sounds a plan!

Double-check that you can do a partial transfer. If not, just use new money for the £500

friolento

@whitevanandy just another thought: you don't actually necessarily need a Tembo ISA to get the mortgage benefits - their HomeSaver will give you the same benefits, and has a great interest rate. Only potential snag is that you have to get the mortgage within 12 months

whitevanandy

Thanks Friolento. I’ll bear that in mind.

kassy64

I've recently done exactly what your trying with Aldermore and they allowed it no problem. I noticed they were offering a better rate yesterday to when I took my fixed rate out 10 days ago. So, opened the new account then closed original account (being within the 14 day cooling off period) transferring everything across to the new higher rate account. all done online in about 15 minutes.