Are the banks ripping us off on ISA transfers

druidude

I have noticed this many times when transferring ISA's between providers.

Latest is when transferring from Cynergy bank to Saffron BS.

The money left my account Friday 22nd arrived at Saffron Tuesday the 26th so 3 days where it is not in my account and were I receive no interest.

Has this happened to anybody else? Is it industry wide that this is a way the banks fleece us. Individually it's probably not much but if this happens to many people it's a nice little learner for them.

Rich2808

This is not unreasonable given the bank holiday weekend - as the funds may not have reached Saffron until yesterday anyway. Ask Saffron if they will pay interest from Friday - when your current provider paid over the funds.

You should check out the HSBC ISA threads on here if you this this is bad - some people have been waiting a month for funds to appear in their HSBC ISA post their current provider releasing the funds.

Barkin

From Saffron ISA FAQ page:

---X---

Do I lose out on any interest while my ISA is transferred?

No – We will always backdate your ISA deposit with us to the date of closure noted by your previous provider.

---X---

https://www.saffronbs.co.uk/FAQs_ISAs

Isthisforreal99

Another nonsense headline, law states cash isa transfers should take a max of 15 working days, so yours was actually 2 working days - not my definition of fleecing - if they were they would take the max time permitted no?

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82013308#Comment_82013308

The 15 days is referring to the whole process, and not specifically to how long the actual money is in transit. AFAIK the latter point has no official target?

Albermarle

You should check out the HSBC ISA threads on here if you this this is bad - some people have been waiting a month for funds to appear in their HSBC ISA post their current provider releasing the funds.

Or the T212 to Santander thread.

Transfer requested mid April. Funds disappeared from T212 on 30th April and have yet to appear again.

masonic

Over 90% of ISA transfers are completed within 7 working days. Some are extremely quick (1-2 days) and some will inevitably take longer, but broadly this has vastly improved over the years.

druidude

https://forums.moneysavingexpert.com/discussion/comment/82013308#Comment_82013308

The ISA transfer was initiated on 6 th May.

1spiral

My biggest gripe with isa transfers is that both parties wont talk to each other when things go wrong, they leave that to you.

I initiated a transfer from Paragon to Saffron at the beginning of April. That has still not completed.

Saffron initiated the transfer around 12th april but waited until 11th May before chasing in writing.

When I returned from holiday on 20th May I contacted both to see what was going on.

Paragon advised me that they'd never received either the original request nor the chasing message on 11th May.

I advised Saffron of this and their solution was that they would resubmit the request to paragon by post.

Personally I think there should be a legal requirement on the receiving company to chase up requests verbally after the allotted 5 days has passed if no response is received. It shouldn't be my responsibility.

SnowMan

This is the recommended practice set out in the voluntary industry code set out in the TISA guidelines (see section 3)

https://www.tisa.uk.com/wp-content/uploads/2023/03/Cash-to-Cash-ISA-Transfer-Industry-Guidelines.pdf

For cheque payments, interest on the transferred funds should be backdated either to the date on the cheque, inclusive, or to the date which represents ‘day 16’ of the transfer process, inclusive – whichever is earlier.

For electronic payments (including those through the BACS electronic system), interest on the transferred funds should be backdated either to the date the payment was initiated, inclusive, or to the date which represents ‘day 16’ of the transfer process, inclusive – whichever is earlier.

While this is voluntary, don't think many financial institutions would chance their luck with an Ombudsman case as it is likely to be adjudged as not treating the customer fairly if there are multiple days during the transfer where no interest is paid.

I made an ISA transfer to Principality which left on the Thursday (the old provider paid interest up to and including the Wednesday) and arrived on the Tuesday after the Easter weekend. Principality have confirmed to me in writing that interest will be applied from when the money left the old provider not arrived with them, even though it is the date of receipt (the Tuesday after Easter) showing on the Principality system. So system dates don't necessarily determine whether interest is lost.

Some providers show two dates on their statements, for example Cynergy show a 'posting date' and a 'value date'. It appears that the 'value date' determines from when interest is paid but I'm not sure about that.

1spiral

https://forums.moneysavingexpert.com/discussion/comment/82014333#Comment_82014333

Its not just interest not being paid that is the issue. In my case Saffron have said that I won't lose out on interest because any interest will start from when the old account with paragon ends (as if that makes it OK for them to drag their heels) but for the duration of this transfer, I have been getting 4.0% in paragon whereas I should've been getting 4.5% with saffron for about the last 3 weeks.