LloydsTSB Fixed rate Isa 6.5%

madonss

For those who think that some of us are overly concerned about the exact end date of the 12 months, this is vital and here’s why;

Lloyds only promise to send the statement “within 30 days” of the end date (see T&C 2.1)
The annual interest is only promised to be credited “within 30 days” of the end of the fixed rate period (see T&C 3.3).

So potentially you lose up to 1 month of compounding on your interest, and your capital sits in a normal “Standard Variable Lloyds TSB Cash ISA” (see T&C 2.2) during this period. Very possibly at up to 1.25% less than it might be earning elsewhere.

In order to avoid this situation you need to be transferring out as soon as possible after the end of the fixed rate, but if you’re too early you lose 90 days interest on the whole amount (see T&C 5.1)

OK, the actual cash difference may only amount to a few quid if you're late, but signficantly more if you're early.
Besides, if you wouldn’t accept being short changed in a shop, or let a work colleague have £10 from your wallet/purse for no good reason why would you let a financial institution do the equivalent? Especially on this board of all places.

6022tivo

I was told my the manager of the branch who opened the account, that the 6.5% rate started on day of opening and will run for 12 months, then revert to standard. If the transfer takes a month interest is only backdated to the cheque date, so in effect he said it is 11 months at 6.5% (if the transfer takes a month).. I at that point pulled a face, he appologised and explained it is how the system is setup and nothing can be done. He did invite me to come in the day it reverts to standard (12 months) as they run a 12 month promotional tie in like the 6.5% every year at this time.

boobbby

6022tivo wrote: »

I was told my the manager of the branch who opened the account, that the 6.5% rate started on day of opening and will run for 12 months, then revert to standard. If the transfer takes a month interest is only backdated to the cheque date, so in effect he said it is 11 months at 6.5% (if the transfer takes a month).. I at that point pulled a face, he appologised and explained it is how the system is setup and nothing can be done. He did invite me to come in the day it reverts to standard (12 months) as they run a 12 month promotional tie in like the 6.5% every year at this time.

Exactly as described in my post No. 828

madonss

I'm sure that it will turn out to be the official answer that the rate and period runs from the application.

If so then shame on them for such a weasly way of classifying a "deposit" in the case of a transfer.


Reverse the situation and think of this..

You apply for a 2yr fixed rate mortgage and get approved.
You do not get charged interest from the application date, and the fix does not run out 2 years after the application date. Both events are triggered the actual fund drawn down at completion. There may be several weeks between application and completion.

Sound similar?

sloughflint

sloughflint wrote: »

Just a thought for the 'untrusting' souls itching to check if they do backdate interest to date of cheque:
I wonder if we can call up and ask for an up to date balance? It was certainly possible with the LTSB variable rate ISA. I'd be given the balance up the the previous day.
I'll call and get my calculator out.
To be continued.....

That was a really bad idea of mine. Please don't bother calling if you wish to remain sane!

Quick precis of conversation:
Asked for up to date balance.Cheque from old provider (LTSB!!!!!) on 4th, funds in new provider (Lloyds FRISA) 11th and that's when the interest starts to accrue ( so much for the backdating promise on that recorded phone message).
I disagreed so get transferred to the ISA Centre who say what should happen ( but they don't deal with the fixed side of things) is that interest should be backdated to 4th and if it is not showing then I should call the number that I had just called.

And all this is for money that has never left LTSB!One week's interest in limboland:mad:
This is going to go on and on.
Still no reply to my letter (link to post).

4leafclover_2

I opened one quickly on the Sunday at 6.5% with the £3000 minimum, but I have now been told I cannot add the remaining £600, so I lose out on some of this year's ISA allowance. I didn't spot that in the T&C If they also refuse to transfer my current cash ISA as requested, I could be stuck with £3000 at 5% for this year so if this happens I guess I will need see if I can transfer it elsewhere if i can.

glossgal

umm getting cold feet about this ISA, opened two weeks ago and my current provider still hasn't been contacted re; transfer.

As my money is going nowhere fast would I be able to open another one with a different provider? (surely there is cooling off period) Or would the calamity be repeated again?!

carpy

4leafclover wrote: »

I opened one quickly on the Sunday at 6.5% with the £3000 minimum, but I have now been told I cannot add the remaining £600, so I lose out on some of this year's ISA allowance. I didn't spot that in the T&C If they also refuse to transfer my current cash ISA as requested, I could be stuck with £3000 at 5% for this year so if this happens I guess I will need see if I can transfer it elsewhere if i can.

that can't be right can it?!?!:mad:

i'm certain i was told i could add money (be it new or transferred) at any time during the 12 months?

4leafclover_2

I was told:
"with this type of ISA you can only make one lump sum deposit, providing it's between £3,000 and £3,600. It's not possible for the branch staff to transfer this into the account for you either.

I'm very sorry if you were not made aware of this when you opened the account."

I am going to follow it up, but I read "Multiple tax year lump sum contributions allowed." as being able to make multiple deposits in a tax year so I've asked them to explain their wording

boobbby

4leafclover wrote: »

I was told:
"with this type of ISA you can only make one lump sum deposit, providing it's between £3,000 and £3,600. It's not possible for the branch staff to transfer this into the account for you either.

I'm very sorry if you were not made aware of this when you opened the account."

I am going to follow it up, but I read "Multiple tax year lump sum contributions allowed." as being able to make multiple deposits in a tax year so I've asked them to explain their wording

If you opened your 6.5% ISA this tax year and was given an account number, you can pay in until the 5th April 2009 up to a total of £3600 (in £100 lumps if you want) and also transfer any other previous cash ISA's.