TSB cash isa 2016/2018 question

edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
6 replies 840 views
what-a-savewhat-a-save Forumite
53 Posts
Part of the Furniture 10 Posts Combo Breaker
edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
Along with Mrs.what-a-save, we had TSB cash isa(s) fixed for 2 years (2016 to 2018)
Transferred out to new cash isa product with Cov BS in April 2018, leaving a nil balance.
Recently received from TSB a cheque for just over £10.00 each interest regarding the account ?

Clearly the full amount including interest should have been transferred, which appeared to be the case leaving the nil balance.

Anyone else received interest on a closed TSB cash isa account ?

Regards

Replies

  • eskbankereskbanker Forumite
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    Presumably it's not a coincidence that April 2018 was when TSB had their infamous major IT problems, so if your ISA transfer was being processed at that exact time (the last week of that month IIRC) then it's not a massive surprise that they didn't get it right!

    Transferring a full balance doesn't necessarily close the old account but if you requested closure and received confirmation of this (as implied by a cheque being issued rather than interest being added to an open account) then all accrued interest should have been added up to the date of transfer/closure.

    Depending on your attitude towards a bit of sport, you could complain to TSB that this small sum would have earned a tiny amount of interest at Coventry had it been transferred correctly back then, if the proceeds don't already include a provision for that....
  • what-a-savewhat-a-save Forumite
    53 Posts
    Part of the Furniture 10 Posts Combo Breaker
    Thanks for your thoughts eskbanker they mirror those of myself regarding the TSB meltdown at the time.

    We didn’t actually close the account as you are unable to do so online, you have to attend a branch to do so and we don’t have one local.

    I have contacted TSB regarding my concern and they assure me an interest allowance of 8% is included ! (Unsure of 8% of what figure)

    My concern for others who may have closed the account is how/ if at all any owed interest would be forwarded to them.

    I may indeed be up for some sport and request a breakdown of the calculations i.e. do they know what interest I was gaining at Cov BS and hence lost. A trivial amount I guess, but hey ho I am retired now and the old adage ‘look after the pennies and the pounds look after themselves’

    How many others may be lost out, who knows ��!♂️
  • eskbankereskbanker Forumite
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    We didn’t actually close the account as you are unable to do so online, you have to attend a branch to do so and we don’t have one local.
    Surely if you didn't close the account then they've done nothing wrong? It's only by closing a savings account (ISA or taxable) that accrued but unpaid interest will be credited ahead of the scheduled payment date (annual?), so if you didn't close the account and simply asked for a transfer of the balance as it was at the time then that's what you got, and the residual interest (for the period between end of fixed term and transfer) would be paid later on. Having said that, it still doesn't explain why they sent a cheque rather than just crediting an open account....
    My concern for others who may have closed the account is how/ if at all any owed interest would be forwarded to them.

    [...]

    How many others may be lost out, who knows ��!♂️
    As above, for those who do close accounts, then all accrued interest will normally be added to the closing balance.
  • what-a-savewhat-a-save Forumite
    53 Posts
    Part of the Furniture 10 Posts Combo Breaker
    My understanding of the workings of a fixed term cash isa is that at the point the fixed term ends and is transferred as in my case, the total accrued interest/balance is paid to the new provider.

    Hence the transfer request has the date of required transfer in order to accommodate the fixed term not being compromised ?

    And as such although the account in theory was not closed there would have been a nil balance the following day so I am at a loss how I could accrue extra interest ?

    I am always happy to learn though, so appreciate your point of view eskbanker.
  • eskbankereskbanker Forumite
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    It depends on the exact dates involved.

    As you say, it's usual for cash ISA transfer requests to have the option of not being enacted until after a fixed term has expired, to avoid the situation where early withdrawal would trigger penalties. However, that doesn't necessarily guarantee that the money will actually leave the old account and reach the new one on the specified date, so it may have been that there was a slight delay?

    Do you have records and statements of the exact date on which the fixed term expired, the date interest (relating to the fixed term) was paid, the date the money left TSB and the date it arrived at Coventry? Unless these were all simultaneous, it's likely that there would have been a brief period within which your money would have been accruing interest at TSB, that wouldn't be payable until the next scheduled payment date, rather than being available to transfer....
  • what-a-savewhat-a-save Forumite
    53 Posts
    Part of the Furniture 10 Posts Combo Breaker
    Yes good point, was likely a delay due to the issues at TSB at that particular time. Although I would have thought I would have been jumping up & down about it at the time ? (If I could get through to them along with thousands of others)

    I will have to retrieve my paperwork and get the calculator out to check their calculations, many thanks for your thoughts Eskbanker.
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