Cash ISAs are a favoured product amongst British savers but many of them are failing to realise the full benefits of the account scheme. If you have an ISA then you could be missing out on some great rates. Read on to find out why you should consider switching your ISA, and how you can go about doing this.
Keeping up to date
Often banks and building societies offer attractive rates on their ISAs over set terms to get customers interested but after the expiry of this offer period the rates drop off. As the UK base rate is currently very low this drop in interest rates can be quite dramatic.
A look around the best buy tables may reveal that the ISA you have put your savings into is no longer paying a competitive level of interest. If you find that this is a case then it’s time to start looking for a new ISA account.
The switching process
If you decide it’s time to move your money then your first move is to identify a suitable ISA for your cash. You’ll need to make sure that as well as having a good rate of interest, the new cash ISA accepts transfer as some accounts won’t. You should also check if there are any penalties on moving your money and factor it into your decision to move.
When you’ve decided on an ISA and arranged to have it opened leave it to the new provider to handle the rest of the switch. It used to be that this switch took as long as two months during which time your money and any potential interest you could earn on it would effectively disappear.
The system was inefficient and deeply unpopular amongst consumers and in 2010 the Office of Fair Trading ruled that the switching process should take no longer than 15 days, allowing you to start benefitting from your new interest rate in a relatively short space of time. Some ISA providers go one better than this and offer you interest from the moment you agree to switch.
If the transfer does take longer for this fifteen days, or you find that the switch has not met your satisfaction then you should in the first instance make your complaint in writing to the party you are unhappy with. If their response isn’t to your satisfaction then you can go to the impartial Financial Ombudsman Service.
ISAs are a great product, offering tax free savings for anyone in the UK – make sure that you get the most out of yours. And remember you’ll need to switch the entire balance of your savings – under government rules you are only allowed one cash ISA at any time.
Are you going to switch your ISA?