Plum Cash LISA Transfer Interest Rates

rkkm

I opened a Plum Cash LISA and requested a transfer from my existing provider. All accepted no problem.

The day I opened the Plum Cash LISA the rate was 4.65% (3.11% with a bonus of 1.54% for 12 months). I requested the transfer the same day.

However whilst waiting for the transfer the rate dropped to 4.06% (3.11% with a bonus of 0.95% for 12 months).

Plum advised the rate you get is dependant on the date the LISA is activated, not on the day you open. So as the rate was 4.06% the day my transfer in completed that is the rate I am receiving.

I read the T&Cs are there is no mention of rates being based on activation date rather than the date you open the account.

I understand rates do change, but is it normal for an interest rate to change from what you signup for? It then means I don't get the advertised rate I believed I was signing up for. I would have gone elsewhere if I knew I wasn't going to get 4.65%.

Any thoughts/ideas appreciated on this.

masonic

HMRC does not consider a LISA "opened" until it has been funded.

But I think the underlying problem here is that you are not entitled to notice of a rate reduction when you don't have a credit balance. The workaround is to subscribe some new money to lock in the rate while your transfer is in progress. But note that the basic interest rate and the bonus are both variable, and...

I can recall getting just a few days notice of reductions while I was with them, and in the case of a BoE base rate change it was normally effective immediately.

rkkm

Thanks for your reply @masonic

The deposit rate stayed at 4.65% for a few days then dropped to 4.06% to match the transfer in rate. However, the account was frozen until the transfer in was complete, so I was unable to make a deposit either.

Oh well lesson learned! Lets hope the rate doesn't drop too much more and I can enjoy a good rate for a little while.

masonic

It's frustrating if they prevent you from adding new money during a transfer in! You of course have other options for your new money, so no need to settle for 4.06%.