Cash ISA with instant withdrawal

Itsmehi

Just got an email from Chip to say they are slashing their Cash ISA rate to 1.02% next month. Obviously I need to transfer it somewhere else PDQ!

The reason I stuck with it is because they offer instant withdrawals to a nominated bank account which is important for me, as well as it being a Flexible ISA.

I think that rules out most of the top accounts - can anyone recommend an alternative?

danco

I'm just evaluating the situation with Chip. Their Smart Cash ISA may work out fine, but I am not sure yet.

cmgurney

Try Tandem at 4% (includes 0.25% top up). Flexible and they claim 24/7 access. I haven't needed to withdraw yet, so can't tell you how that plays out in practice. I'm really annoyed with Chip - I suspect they are trying to force people to their new 'Smart' ISA, which has hidden pitfalls. This tax year I've withdrawn £2K more than I deposited so need to get that £2K back into the account before I initiate a transfer. Their app has crashed under the weight of outraged customers, so I have emailed them demanding the right to put that money back in. (To make things clear to those who haven't read the Chip email - they are not allowing any new deposits, so the 'flexible' ISA is no longer flexible, which is sharp practice and can't be allowed.)

epm-84

I'd suggest Tesco Instant Access ISA. It's effectively Barclays under the Tesco brand, so paying in and out should be as quick as with any bank account. Interest rate is 4.06% including a 3.01% bonus for the first 12 months. So obviously don't keep your money in there after 12 months, but it does have the advantage if interest rates start dropping, the rate can't fall below 3% until after 12 months.

epm-84

https://forums.moneysavingexpert.com/discussion/comment/82030513#Comment_82030513

Make sure you don't miss "Unpaid interest is forfeited if the account is closed or transferred out before your account anniversary."

Itsmehi

Thanks, I’ll take a look, thank you.

Since I posted this, I also think Tesco might fit the bill (it’s called Instant Access after all) so will double check them both when they’re open tomorrow before I decide.

Yes, super annoyed as well as I’ve withdrawn some since April, with a view to topping it back up over the course of the year. If I transfer it, I’m going to lose that allowance now. I’m also unable to log in.

I did interpret that it was just no transfers in, not no deposits, from their email, but either way 1% is not something I will be sticking around for…

You’re completely right that they are pushing their new product, which definitely has some less favourable terms. Their strategic follow up email of “oh btw our new ISA isn’t affected why not go open one” less than hour after the initial email didn’t go unnoticed… not impressed at all

MeteredOut

https://forums.moneysavingexpert.com/discussion/comment/82030518#Comment_82030518

I've also currently "borrowed" some money from my Chip ISA, so have initiated a partial transfer for all but £1 of my Chip balance whilst deciding what to do.

The wording on the email states "You will no longer be able to transfer into the Chip Cash ISA from today.", and I read that as new money, rather than any redeposits, but its not 100% clear. The Chip App does show how much "replaceable ISA funds" you have so it could be they still allow that to be added.

But, even if redeposits are not allowed, leaving the current ISA with £1 gives me the choice of converting that it to the new Smart ISA, re-depositing when ready, and then doing the transfer to another provider (but will lose any unpaid interest). I'm assuming the flexibility carries over from the current ISA to a smart ISA but admit i've not checked that yet.

To answer the OPs original question, I've also got a Virgin ISA (flexible) which provides an immediate transfer to my nominated account.

Itsmehi

Thanks so much on both counts MeteredOut. Definitely some food for thought.

cmgurney

https://forums.moneysavingexpert.com/discussion/comment/82030560#Comment_82030560

That's the big catch. There's nothing to stop them dropping that account to 1.06% once they have you locked in for 12 months.

cmgurney

https://forums.moneysavingexpert.com/discussion/comment/82030567#Comment_82030567

I thought it wasn't possible to do a partial transfer from Chip.

MeteredOut

https://forums.moneysavingexpert.com/discussion/comment/82030582#Comment_82030582

The Smart ISA "Tracks 0.06% (gross) under the Bank of England base rate", so that should not happen, but what they've done today is pretty underhand, so I agree something similar cannot be ruled out.

But, since that would be a change to the T&Cs, I'm not sure they could enforce the "lose unpaid interest" if they did do that.