Customers who hold their savings in their cash individual savings accounts (ISAs) will be pleased to learn that new rules have been introduced which will prevent long delays in transferring money between accounts.
Those wanting to earn higher interest rates and are planning to move their money to highest paying tax-free savings accounts in order to do so, have been subject to delays in the time taken to transfer the cash. These delays were costing savers up to £3 billion a year.
Following numerous complaints, The Office of Fair Trading (OFT) has announced that banks and building societies must now complete money transfers within 15 working days.
Currently, the time allowed is 23 working days. Last year, the OFT revealed that the average cash ISA transfer was taking between 26 and 30 working days, during which time the customers were earning the lower rate of interest paid by their previous provider.
The OFT regulations also state that interest must be paid by the new provider within two days of the funds being received.
Some banks, including Halifax and Bank of Scotland, have pledged that all customers switching to their cash ISAs will reap the interest rewards from the date the application form is received.
