Transfer Cash ISAs Discussion Area

kostigovs

MarkyMarkD wrote: »

The 30 day limit is an HMRC rule, for the transferring institution to respond to a request for funds from the transferee institution. There is no limit on how long the transferee organisation can take to request the funds, though.

Be careful about attributing blame unless you know that the fund request has been issued.

Regarding A&L, they DO allow transfers in from outside. But doing the dual transfer you propose is:

(1) unfair on the "piggy-in-the-middle" institution who is doing lots of work for no reward; and
(2) liable to failure because A&L are very likely to pull the product before you manage to transfer into it.

In any case, A&L's product isn't best buy. So why not just transfer directly from A&L to the best buy, and then stay there? Why go back to A&L at all?

Many thanks for the clarification re. the 30 day rule. I already have a letter from Northern Rock advising me of their request for the funds

Abetorius

Sorry if this has been answered before or if there is a FAQ for it (I've not been able to find it so far with either the search function or thread browsing).

I currently have an ISA which has about half of last years allowance and a small part of this years allowance in it. I realise that it is almost 0.5% less than the leading ISA in interest value and am considering transferring to a better rate.

My questions are these:
How many times and how often in a single financial year (April-April) can you transfer an ISA?
I've been reading that it will probably take 30 days to transfer and that during that time you receive the existing interest rate, how long will it need to stay in the new account before I can transfer it out again, assuming a better rate appears during the month that it's in transfer?

Lokolo

Theres is no limit to the number of times you can transfer.

However everytime you transfer you may lose around a weeks worth of interest. So if you keep doing it you won't gain anything.

MarkyMarkD

This is why I counsel against attempting to chase the very best, best buy for ISAs. It is pointless choosing an ISA on the basis that it's best buy today, if it is not likely to be best buy for more than a month or two.

Far better to choose one of the longer-term consistent best buys.

As Lokolo says, you will often lose a week's interest on a transfer depending on when the recipient institution starts crediting interest. There will always be a few days' loss of interest "in the post" and if that's over the weekend, another few days. And then possibly a few days' clearance time too.

If you are earning 3% on your ISA, then one week's interest each month is equivalent to reducing the return to 2.25%. Even one week's interest each quarter is equivalent to reducing the return to 2.75%. It's not worth chasing around for margins of 0.10% or 0.20% UNLESS you intend to stay there for a lot longer than 3 months at a time.

KGriff

In this 2008/9 tax year I have been subscribed to Lloyds-TSB Fixed rate ISA at a good ol' rate of 6.5% (lucky me) which matures on 25 February 2009.

Obviously if I cash in the £15000 before that date there will be a penalty (apparently the penalty applies to the whole amount of interest) - I am not sure what percentage I would lose at this stage - Hopefully not a not as the February date is fast approaching.

Anyhow here is my problem - Lloyds have written to me offering a NEW fixed rate deal for next year 2009/10 which again is Fixed for 12 months at 3.25% (based on the sum of £15000) - Lloyds however wants a response from me no later than the 9th February.

Shopping around the Halifax will give me 3.9% Fixed if I transfer to them and choose tie it up for 2 years or 4% if I opt for the 3 year deal.

Yesterday I popped along to Halifax to make some enquiries and was told if I completed their ISA application form today it would take 4 weeks or so to complete the process but because the form is dated prior to the 25th February I would have to possibly pay the Lloyds ISA penalty for closing the account early - particularly if Lloyds processed the transaction quickly. (i.e. prior to maturity date)

This leaves me with a predicament - do I accept the Lloyds 3.25% offer before the 9th February or should I let it go and HOPE that Halifax still have the fixed rate offer on the 25th February and switch on that date?

When I asked the Lloyds staff about this matter they said they do pay interest up to the date the cheque is paid to Halifax but they would take the Halifax ISA application & transfer dates for the account closure - meaning I may have to pay a penalty on the full amount of interest.

The lady at Lloyds did smile nicely when saying 'It seems we get you every way you turn':rotfl:

I was wondering what advice anyone may have in this situation. Stick with the Lloyds lower rate or take the chance and wait it out till the 25th?

boobbby

KGriff wrote: »

In this 2008/9 tax year I have been subscribed to Lloyds-TSB Fixed rate ISA at a good ol' rate of 6.5% (lucky me) which matures on 25 February 2009.

Obviously if I cash in the £15000 before that date there will be a penalty (apparently the penalty applies to the whole amount of interest) - I am not sure what percentage I would lose at this stage - Hopefully not a not as the February date is fast approaching.

Anyhow here is my problem - Lloyds have written to me offering a NEW fixed rate deal for next year 2009/10 which again is Fixed for 12 months at 3.25% (based on the sum of £15000) - Lloyds however wants a response from me no later than the 9th February.

Shopping around the Halifax will give me 3.9% Fixed if I transfer to them and choose tie it up for 2 years or 4% if I opt for the 3 year deal.

Yesterday I popped along to Halifax to make some enquiries and was told if I completed their ISA application form today it would take 4 weeks or so to complete the process but because the form is dated prior to the 25th February I would have to possibly pay the Lloyds ISA penalty for closing the account early - particularly if Lloyds processed the transaction quickly. (i.e. prior to maturity date)

This leaves me with a predicament - do I accept the Lloyds 3.25% offer before the 9th February or should I let it go and HOPE that Halifax still have the fixed rate offer on the 25th February and switch on that date?

When I asked the Lloyds staff about this matter they said they do pay interest up to the date the cheque is paid to Halifax but they would take the Halifax ISA application & transfer dates for the account closure - meaning I may have to pay a penalty on the full amount of interest.

The lady at Lloyds did smile nicely when saying 'It seems we get you every way you turn':rotfl:

I was wondering what advice anyone may have in this situation. Stick with the Lloyds lower rate or take the chance and wait it out till the 25th?

This is always a predicament when you have all your eggs in one basket. The best way to have ISA's is a combination of fixed and instant access or a couple of fixed ISA's (most providers allow partial transfers) so that in an emergency you can use cash from one without effecting the other. I would not transfer from the Lloyds 6.5% as you never know they might offer a fixed rate higher than 3.25% in a months time. Dont forget Lloyds and Halifax both now sleep in the same bed!! I also have a fixed ISA at 6.5% with Loyds but until November 2008 another variable ISA with the Halifax. In November I noticed rates where going to be reduced and changed my variable ISA to a fixed rate at 5.25% for one year. This was carried out instantly as I was at the counter.

clouds21

In my own humble experience both Lloyd's and Halifax/ HBOS have a habit of messing ISA transfers up really badly. I had an awful trouble with my interest payment which they issued to me by cheque, despite my having opted to have the interest added to the ISA account...needless to say it took forever to sort out, so I personally would never deal with either of them again. But I guess it depends on who you're (un)lucky enough to have dealing with your accounts. :-)
KGriff: I'd stay where you are and as Boobbby says, there'll probably be more offers in the bunfight up to the end of the tax year.

clouds21

RobJJDN20

Hi, after a bit of advise from all you MSE please?

I'm in the middle of a January financial healthcheck at the same time as my partner.

I have two ISAs - both with Barclays. One from 07/08 which is now variable rate- have just under £1k in there
The other is this year's Barclays Tax Haven ISA which has barely anything in at present. I'm sure you're aware Barclays wouldnt let me transfer my 07/08 ISA into this current one.

My partner has an ISA with Yorkshire BS currently at 3.3% variable of about £500. We're looking at combining our finances - we simply havent got enough disposable income to benefit from having two seperate ISAs so we're considering moving the money from her ISA into one of mine (or vice-versa).

So- firstly; why should I not simply close the original 07/08 ISA, claiming the interest earned up until now then pay the money from this into my exisitng Tax Haven ISA (reminder- Barclays won't let me transfer in to this Tax Haven one)? This would be going against Martin's golden rule of ""Never, ever, ever, ever withdraw money from a cash ISA! You'll immediately lose all the tax benefits." but I still don't understand what problem this is going to cause?

Secondly, the same applies to my partner- she could close hers, transfer the money to me then I could put it my Tax Haven ISA. I'd still be under the £3,600 limit for this year with the 07/08 one and my partner's combined. In future she'd pay me a portion of her wages combined with some of mine to go towards future contributions to this Tax Haven ISA (until after April 09 where i'm likely to transfer to an ISA I know I can transfer into at the best possible rate). Again as a reminder- we still wouldn't have enough disposable income for contributions to max the £3,600 limit at present, unless my boss gives me a pay rise in April (yeah right!).

Can someone please help me with my predicament? Many thanks.

MarkyMarkD

If you are not going to use up the full £7,200 current year allowance between you, even if you DO close a previous year ISA and pay it in as a new year's subscription, then you are right that you are not losing by closing the previous year's ISA.

But unless Barclays is the best buy - and I don't think it is - why would you do this when you could open a new one somewhere else (and probably transfer the previous year Barclays money in too).

boobbby

RobJJDN20 wrote: »

Hi, after a bit of advise from all you MSE please?

I'm in the middle of a January financial healthcheck at the same time as my partner.

I have two ISAs - both with Barclays. One from 07/08 which is now variable rate- have just under £1k in there
The other is this year's Barclays Tax Haven ISA which has barely anything in at present. I'm sure you're aware Barclays wouldnt let me transfer my 07/08 ISA into this current one.

My partner has an ISA with Yorkshire BS currently at 3.3% variable of about £500. We're looking at combining our finances - we simply havent got enough disposable income to benefit from having two seperate ISAs so we're considering moving the money from her ISA into one of mine (or vice-versa).

So- firstly; why should I not simply close the original 07/08 ISA, claiming the interest earned up until now then pay the money from this into my exisitng Tax Haven ISA (reminder- Barclays won't let me transfer in to this Tax Haven one)? This would be going against Martin's golden rule of ""Never, ever, ever, ever withdraw money from a cash ISA! You'll immediately lose all the tax benefits." but I still don't understand what problem this is going to cause?

Secondly, the same applies to my partner- she could close hers, transfer the money to me then I could put it my Tax Haven ISA. I'd still be under the £3,600 limit for this year with the 07/08 one and my partner's combined. In future she'd pay me a portion of her wages combined with some of mine to go towards future contributions to this Tax Haven ISA (until after April 09 where i'm likely to transfer to an ISA I know I can transfer into at the best possible rate). Again as a reminder- we still wouldn't have enough disposable income for contributions to max the £3,600 limit at present, unless my boss gives me a pay rise in April (yeah right!).

Can someone please help me with my predicament? Many thanks.

I agree completely with MarkyMark. If you cant find an Isa paying more than 3.1% then you may as well go ahead and move any previous money into your Barclays Tax Haven Isa. Better still for you is to consider opening a monthly savings account with Barclays and get 6% and at the end of 12 months move that money into an ISA. I think Martin is mainly advising people who have been saving for a number of years not to give up their tax free ISA money. Mine is now giving me over £2000 interest a year so I can have at least £5600 to add into my next years ISA. I will then transfer to the next highest paying ISA (providing this is allowed)