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Cash ISA transfer time much improved

Cash ISA transfer time much improved

Category: Savings

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
The speed of ISA transfers has improved significantly since the Office of Fair Trading (OFT) ordered action to be taken two years ago.

Consumers are able to transfer ISA balances each year, as long as their new accounts allow balances to be carried across.

On many accounts, it's worth transferring balances each year as sizeable cash ISA bonuses boost the rate in the first year, but end after 12 months.

For example, a cash ISA may offer a rate of 3.20% for 12 months, including a 2.20% bonus. While this would be very competitive in the first year, once the bonus period ends the account would only offer 1.00% interest.

As such, transferring balances is very popular amongst savvy cash ISA savers, but a super-complaint from Consumer Focus about the amount of time it took to move balances prompted the OFT to look into the problem.

In its investigations in 2010, it was found that across the period April 2008 to April 2010, transferring cash ISAs took just over 26 calendar days on average, with 25% of transfers taking longer than 30 calendar days.

The regulator then ordered that all ISA transfers be completed more quickly.

Since then, more than 90% of all cash ISA transfers carried out last year were completed within 15 working days.

Additionally, cash ISA providers are now back-dating interest if the transfer is delayed beyond this, and are publishing interest rates on cash ISA statements.

"People considering switching cash ISA in the new tax year should have confidence that the process will be quick and effective, and that if things do take longer, they won't lose out financially," said Claire Hart, director in the OFT's Services, Infrastructure and Public Markets Group.

"We welcome the progress made by providers of cash ISAs since the OFT took action in 2010 but we would encourage the industry to consider ways to reduce cash ISA transfer times further."

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We have replaced the Best ISA Transfer chart with more new charts, all of which include those ISAs which allow you to transfer to a new ISA provider, just check the column "transfer in"

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.