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  • FIRST POST
    • Paul_DNAP
    • By Paul_DNAP 16th Apr 18, 12:34 PM
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    Paul_DNAP
    Fixed ISA Maturing? Be careful!
    • #1
    • 16th Apr 18, 12:34 PM
    Fixed ISA Maturing? Be careful! 16th Apr 18 at 12:34 PM
    Here's a little warning about a new (to me) abuse of the "do nothing" option being a bad thing.

    My mother has a YBS (Yorkshire Building Society) fixed-term ISA about to mature and has received the paper work asking what she wants to do with it. We had a read through yesterday (I have to earn my Sunday lunch!). It was a three year fix at 1.98%, but that's not the point.

    The do-nothing will default to "option 1" which is for the ISA to automatically roll over into their "Fixed Rate Cash ISA until 30/04/2020" (i.e. a new two year fix) at the interest rate of 1.10%

    My mother was annoyed at that rate, and I said "no, that's far from the best in the market" and with a little research - IT ISN'T EVEN THE BEST YBS OFFER - yes, I really did feel the urge to put that in all caps, and there's more, it isn't even the published rate for that product.

    On their webpage, their "Fixed Rate Cash ISA until 30/04/2020" is offered at the rate of 1.45% - which is 0.35% better than they will pay you if we do nothing and just let the ISA roll over automatically.

    (In fact their 1-year fix is better, at 1.20%, but my Mother is intrigued by the 3-year fix at 1.65% - again, why are these product not offered on the paperwork for what to do with her maturing account is a mystery.)

    The "option 2" is to allow it to roll over into their "Triple Access Cash ISA" at 0.9%, but at least then the funds will be available for transfer and not locked again.

    My Mum will visit the branch and ask to see if it's possible to schedule it to roll over to the 3yr at 1.65%, otherwise it's option 2 and then open that (or somewhere else) and transfer it over.

    (And before you ask, she's not investing for growth, this is one of the funds that pays into her bank account for "spending money" on top of her pensions. She will be okay with the hit in return going from 1.98% to 1.65% but not going to 1.10%. We did look at an alternate ISA at the Skipton BS giving 2.0%, but her main ISAs are all there already and she's a little worried about going over the FSCS 85k)

    But, the main point is - always make sure you research if the "do-nothing" option the best.
Page 1
    • Alexland
    • By Alexland 16th Apr 18, 1:51 PM
    • 2,389 Posts
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    Alexland
    • #2
    • 16th Apr 18, 1:51 PM
    • #2
    • 16th Apr 18, 1:51 PM
    I have never done a fixed rate Cash ISA (gave up on Cash ISAs years ago) but yes I agree a 'do nothing' that rolls over into a new fixed rate at an unattractive unpublished rate is pretty poor practice.
    • brewerdave
    • By brewerdave 18th Apr 18, 9:44 AM
    • 4,845 Posts
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    brewerdave
    • #3
    • 18th Apr 18, 9:44 AM
    • #3
    • 18th Apr 18, 9:44 AM
    Just run into a similar situation with my wife's fixed Halifax ISA coming to maturity after 3 years. Trying to sort it out ,feels like Alice vanishing down a rabbit hole!!
    All set up online originally, by transferring in from elsewhere and topping up with cash. However, when we tried to roll over some monies and withdraw the balance
    Online we can only roll it all over, so we filled out the appropriate forms - letter received, no go, as they haven't got my wife's signature on file ....so have to go to a branch who witness the signature with proof of identity and address...but who then say that they can't action our requirements....we have to phone the ISA helpline after the maturity date !!!
    Wish we had just transferred the whole lot out to elsewhere!!!
    • powertron
    • By powertron 19th Apr 18, 7:37 PM
    • 258 Posts
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    powertron
    • #4
    • 19th Apr 18, 7:37 PM
    • #4
    • 19th Apr 18, 7:37 PM
    I thought when most fixed ISAs mature, banks just stick them into rubbish accounts with rates of 0.1% or less.

    Didn't know some of them stick them into anther fixed account, would you have the 14 day right to cancel?
    • Paul_DNAP
    • By Paul_DNAP 20th Apr 18, 9:58 AM
    • 67 Posts
    • 80 Thanks
    Paul_DNAP
    • #5
    • 20th Apr 18, 9:58 AM
    • #5
    • 20th Apr 18, 9:58 AM
    I thought when most fixed ISAs mature, banks just stick them into rubbish accounts with rates of 0.1% or less.

    Didn't know some of them stick them into anther fixed account, would you have the 14 day right to cancel?
    Originally posted by powertron

    I think the advanced notice and giving her the option to not allow that is a substitute for the 14 days right to cancel after it has happened. (but I am not an expert on that).


    And yes, it used to be that these things would default to rolling into a very very low rate instant access account, but this default option of rolling over into a low rate fixed account is reasonably new to me. (especially when the account is substantially worse than the products on general sale).


    Anyway, I think Mum has been to see them, so I will no doubt get the full update this weekend.
    • Paul_DNAP
    • By Paul_DNAP 23rd Apr 18, 8:47 AM
    • 67 Posts
    • 80 Thanks
    Paul_DNAP
    • #6
    • 23rd Apr 18, 8:47 AM
    • #6
    • 23rd Apr 18, 8:47 AM
    Here's the info my Mum got from the branch.
    They can't put the rates available on the website into her letter as they can't guarantee that those products will still be on sale when her account matures 1st May. They can guarantee that there will be at least the 1.1% available.
    When it goes into that 1.1% ISA there is one month free access before it is fixed, so the man in the branch said come talk to him after it has rolled over and they can look at what is available at that time.
    She will also, of course, be free to move it elsewhere at that time as well.
    (Although I could be wrong, I often am.)
    • Zorillo
    • By Zorillo 23rd Apr 18, 9:21 AM
    • 160 Posts
    • 86 Thanks
    Zorillo
    • #7
    • 23rd Apr 18, 9:21 AM
    • #7
    • 23rd Apr 18, 9:21 AM
    That seems reasonable to me.
    • harz99
    • By harz99 29th Apr 18, 12:27 AM
    • 2,665 Posts
    • 2,595 Thanks
    harz99
    • #8
    • 29th Apr 18, 12:27 AM
    • #8
    • 29th Apr 18, 12:27 AM
    Here's the info my Mum got from the branch.
    They can't put the rates available on the website into her letter as they can't guarantee that those products will still be on sale when her account matures 1st May. They can guarantee that there will be at least the 1.1% available.
    When it goes into that 1.1% ISA there is one month free access before it is fixed, so the man in the branch said come talk to him after it has rolled over and they can look at what is available at that time.
    She will also, of course, be free to move it elsewhere at that time as well.
    Originally posted by Paul_DNAP

    Your lucky to get a month. Kent Reliance do this same thing with rolling over into a fixed rate that is worse than their advertised rates for the same type of account, but only give you 14 days from the rollover date to change your mind.


    I've a battle coming on Monday when KRs UK office opens as I was away on holiday when the maturity letter was issued, so never received it until RM Keepsafe delivered my stored mail, which left me one or two days past the 14 day cut off, and I want to transfer to another provider so KR (via their Indian Call Centre) are saying I will have to pay a penalty.
    • Alexland
    • By Alexland 29th Apr 18, 9:20 AM
    • 2,389 Posts
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    Alexland
    • #9
    • 29th Apr 18, 9:20 AM
    • #9
    • 29th Apr 18, 9:20 AM
    Sounds grim, good luck with that.
    • Julesmarket
    • By Julesmarket 29th Apr 18, 2:34 PM
    • 14 Posts
    • 3 Thanks
    Julesmarket
    ISA Maturity over 20000
    A good problem to have I know but we have an ISA which has been added to over the years and has been with Birmingham Midshire for a Fixed Rate for the last 3 years. It is now - including the interest over the 20,000 you can invest in an ISA.
    Does anyone know what happens if you transfer into another ISA (the Birmingham Midshires rates are rubbish!) and it is over this limit?
    Is it allowed?
    Many thanks for any help?
    • harz99
    • By harz99 29th Apr 18, 2:54 PM
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    harz99
    A good problem to have I know but we have an ISA which has been added to over the years and has been with Birmingham Midshire for a Fixed Rate for the last 3 years. It is now - including the interest over the 20,000 you can invest in an ISA.
    Does anyone know what happens if you transfer into another ISA (the Birmingham Midshires rates are rubbish!) and it is over this limit?
    Is it allowed?
    Many thanks for any help?
    Originally posted by Julesmarket

    The sum you refer to is the current annual tax year maximum contribution for NEW money, if you simply transfer an existing Cash ISA that money is not "new" money as it is from previous tax years.
    • harz99
    • By harz99 30th Apr 18, 11:23 PM
    • 2,665 Posts
    • 2,595 Thanks
    harz99
    Your lucky to get a month. Kent Reliance do this same thing with rolling over into a fixed rate that is worse than their advertised rates for the same type of account, but only give you 14 days from the rollover date to change your mind.


    I've a battle coming on Monday when KRs UK office opens as I was away on holiday when the maturity letter was issued, so never received it until RM Keepsafe delivered my stored mail, which left me one or two days past the 14 day cut off, and I want to transfer to another provider so KR (via their Indian Call Centre) are saying I will have to pay a penalty.
    Originally posted by harz99

    Just for completeness;


    I didn't quite win the battle with KR as their English CS office insisted I would pay a penalty to transfer out because 14 days had passed, however they did agree to move my ISA to the current 2 year fixed rate offer without penalty rather than the "loyalty" ISA, which raises the interest to 1.68% from 1.5% and I was able to cancel the transfer with the new provider.


    Have also raised a complaint regarding not being moved onto the best available rate at the time of the move, which is very sharp practice in my book.
    • Paul_DNAP
    • By Paul_DNAP 1st May 18, 12:08 PM
    • 67 Posts
    • 80 Thanks
    Paul_DNAP
    Just for comparison, I have a 5yr fixed ISA with Skipton BS that matures 14MAY18, and their letter explains that the do-nothing is to go into their one year fixed (as per T&C when opening the account), but they give a list of all their available fixed term ISAs for me to choose from (same rates as online and in branch at the moment).


    The key wording I noted was that if their available rates drop between now and then they'll honour the rates in the letter, but if the rates rise then they will give me the rate it rises to. Which I think is a nice way to handle it.


    In the end though, I've selected it to mature into their instant access cash ISA and will transfer it out to a different provider. I'm over 85k in Skipton and fancy spreading it around a little bit more so this 20k will be moving closer to where I am now, Furness BS 5yr fix at 2.20% (I just need to make sure they don't request the transfer before 15MAY, as it won't be available.)


    I have another one maturing in June, which I think the Skipton can keep hold of, but I am tempting to hedge a bit on increasing interest rates and go for a shorter term.
    (Although I could be wrong, I often am.)
    • harz99
    • By harz99 1st May 18, 5:32 PM
    • 2,665 Posts
    • 2,595 Thanks
    harz99
    And finally, complaint to KR upheld with 50 compo cheque finding it's way to me sometime soon (I hope).
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