Nationwide, where is my interest?

born_again_saver

I've just transferred my entire ISA balance from the Nationwide Instant Access Cash ISA to the 1 year Fixed Rate ISA bond paying 6.15%.

I've just received the paperwork and my cancelled passbook for the old account in the post, the transfer was done really promptly. So far so good, until I check the amount on the ISA bond certificate - it's exactly the same as the previous balance on the old ISA. No interest has been added to the old ISA or the new onto my balance for this tax year (it's paid annually on 31st March). The total balance has ranged from around £1500 to over £4000 with no withdrawals this tax year, so I'm due a not insignificant amount of interest.

So, where has my interest gone? I've checked my Flexaccount just in case it's somehow slipped in there, but no. Somehow it has evaporated. I'm a bit miffed to say the least, as I was under the impression that my old account's interest would be made up before the transfer to the bond took place - I want the interest in there earning interest too. They can't just not give me the interest, surely? Or do I have to wait until 31st March for it?

I'm obviously going to get this sorted out, but I have a sneaking feeling I'll have a fight on my hands to get the interest added onto the bond. And I just wanted to warn anyone doing a similar transfer during a tax year - don't forget your interest due for the preceding year.

Milarky

If the account was genuinely closed in the process then you should have interest included - otherwise are you sure you have not simply drawn the balance down to nil?

Second thought: the Bond is opened with a specific amount of money. The Nationwide gnomes have carried out your request to open the bond with '£X' and it is not their job (as they see it) to look any further.

As always, this depends on knowing precisely what instructions you gave Nationwide - it is a good idea in general to refer to 'additional instructions' (pertaining to the transfer of an ISA) on any pre-printed form you sign and to write these in as many specifics as you desire on separate sheet. Too many people just trust the banks and building societies to 'get on with it' when the evidence of experience is that they make errors rather often and so cannot be wholly trusted to do so.

born_again_saver

The passbook says "converted to fixed rate ISA bond" so I'm pretty sure it has been done as a transfer and not drawn down to zero.

I told the person I dealt with at the branch that I wanted the whole lot transferred over to the new ISA, to be honest I think it is an error on their part as they said they needed to update the passbook after the overnight run (presumably with the interest made up to that date), but this has not been done. Obviously whoever then processed the bond just used the final balance. I had meant to ask specifically about the outstanding interest and thought I had done, but I did ask quite a lot of questions and maybe left that one out or it was ignored if I did specify it.

PS I don't trust them to just "get on with it" either and this proves us right, sadly it's a fact of life that we have to deal with bureaucratic ineptitude...

pem2

I also have just transfered my Members' ISA Bond into the 6.15 1yr fixed and likewise have not had any interest added. I will be interested how you get on and will be contacting my local branch for an explanation.

robnye

when is the interest normally paid?
have you transferred before the interest payment date?
is there a penalty for transferring before the interest date?

Thomas_Crown

born_again_saver wrote: »

I had meant to ask specifically about the outstanding interest and thought I had done,

..................... and maybe left that one out

PS I don't trust them to just "get on with it" either and this proves us right, sadly it's a fact of life that we have to deal with bureaucratic ineptitude...

So that's a 'definite maybe' as to whether you asked about the interest?

born_again_saver

The annual interest date is 31st March, so yes, I have transferred 2 months before this. I have read the T&C's for the old ISA, there is certainly no interest penalty for transferring before the interest date.

To be honest the more I think about it, I can't specifically remember asking about the interest at the time, although I had been concerned about this. I did actually say that I wanted to transfer "everything" from the existing ISA to the new though. None of the answers I was given to the other questions I can recall were particularly clear, in hindsight I wish I'd walked away from it at that point as that's never a good sign. But it's not easy for me to get to a branch (compulsory to open the bond) and I was keen to keep the ISA at the same provider - supposedly to keep things simple transfer-wise - and I felt the fixed interest rate on offer at this time was good, so I (perhaps rashly?) went ahead.

From reading other ISA transfer related posts here of similar experiences, it did seem like adding on the interest would be done as a matter of course, and I have to say this has been my experience in the past with other savings accounts, although not specifically with ISAs. I've not done an ISA transfer like this before and was hesitant to do so at all in case of something such as this "going wrong", I feel I did take reasonable steps to look into how it all worked and had posted previously to ask what happens in this particular kind of situation.

My transfer has gone through as of the same day I opened the new bond account, despite the "missing" interest. So on the bright side I've got a much better rate of interest on the rest of my cash which is fixed for 1 year, and didn't experience an interminable period of transfer to another provider. It would be nice to get my interest for the last 10 months though...

Pem2, I'm also interested to hear how you get on at your branch. I'm not sure if your T&Cs will differ as you had a members' bond beforehand, but let's hope we get back our interest.

And for anyone else receiving annual interest, the moral of the story is - ask what's happening to your x months' outstanding interest BEFORE you transfer!

Fella

I thought it was standard practise for ISA transfers that the interest up until the date of transfer was added when the old ISA was closed?

RayWolfe

It is.
I suspect this is because it is not a transfer in the normal sense but a move from one account to another with the same organisation. No real excuse, however, I think the interest should have been added.

born_again_saver

I've now been into the branch to get an explanation. Raywolfe is right, it's all to do with it being a move within the same building society and not a true transfer elsewhere or a closure.

I have been assured that the interest still exists and is still accruing, and will show up on the account on the 31st March. In the meantime, the interest is still part of the bond and is earning interest on itself at the bond's rate of interest, and this will all show up on the annual statement sent out at the end of the tax year. It just doesn't appear on the bond certificate immediately, as the transfer/move/conversion/whatever-it's-called occurred before the annual update of interest on 31st March.

It still seems like an odd anomaly as if I'd closed the account or transferred into an ISA elsewhere then of course I'd have got the interest added to the point of closure/transfer. I imagined that as it's a bond that it wouldn't be possible to add the interest on later, but they have assured me this is what will happen.

It just feels a bit unsettling to have no evidence of this extra money on the bond certificate, particularly when all the documentation came through with no indication of when I would get the interest. I'm sure it'll all work out fine now but I'm going to estimate the interest to 31st March just in case.

RayWolfe

Very strange, particularly as, if it were a transfer, you would be getting the higher rate of interest on the interest until the end of march. A piddling amount but that's not the point.