Bank accounts and (dormant) cash ISAs – both tackled in July!


It’s a good job I’m writing this blog, as it forces me to take action when I don’t want to. I’m not sure why I find it so hard to do some relatively simple tasks – possibly because I find them excruciatingly dull and boring (you might ask why I’m inflicting my description of them on you then – sorry!), possibly because I think they’ll be more difficult than they actually prove to be.

Earlier this month, I set myself the following straight-forward goals for July:

  1. Open a new savings account.
  2. Move my cash ISA, which has become dormant.

Well, I did both. When? Today, with the end-of-month deadline looming large!

Santander 123

So, for the savings account, I applied for the Santander 123 current account. I had a momentary dither when I read the news from the past few days saying that the current maximum 3% interest (paid on larger balances) is rumoured to be on its way out. Apparently, Santander might reduce the maximum interest to 2% later this year, possibly also increasing the current minimum 1% interest (paid on smaller balances) to 2% at the same time. If this is the case, those with smaller savings will benefit, while those with larger balances will be worse off. Despite its recent fee increase from £2 to £5 per month, it seems the account is still not profitable enough for the bank.

That I decided to apply regardless of this potential change is a sign of the difficult times we face as savers in trying to find decent returns with incredibly low interest rates – I think it will still be the best account for my money. I’ve been putting off applying because I feared it might be complicated, needing to specify from the outset the direct debits I’ll be setting up on the account. However, it was literally a 10 minute job – a few personal details, gross annual income, net monthly income, and approximate total monthly outgoings. I should find out in the next few days if my application has been accepted.

Cash ISA Transfer

I’ve also just opened a new cash ISA – the Virgin 1 year fixed rate ISA – in order that I can transfer in an old cash ISA I had with Santander. It pays 1.3%, which is about as good as 1 year fixed rates get at present. Not much higher than the best variable rate ISAs which offer about 1.2% (First Direct has one at 1.3% for those with the 1st Account) but, with the Bank of England looking as if it might reduce interest rates later this year, I thought the variable rate might soon drop lower.

I’d left my existing cash ISA untouched for over 5 years (more on that in a moment….) so also considered one of the 5 year fixed rates of up to 1.9%, but I wasn’t sure I wanted to commit to tying my money in for that length of time. So 1 year fixed it was.

The application was pretty straight-forward, all I now need to do is send an ISA transfer form – by post, despite the rest of the application being online – and hopefully all will be well. I say hopefully…..

Dormant Cash ISAs

….because did you know that a dormancy block can be placed on a cash ISA if you’ve not used the account for 5 years? I didn’t, until I got a letter from Santander recently saying that this has happened with my account.  I was using the account as a long-term savings account, so had no activity on the account for the past 5.5 years, but apparently this meant that it was now deemed dormant! It seems some banks exclude cash ISAs from these dormancy rules, but Santander isn’t one of them. So if you find yourself in the same situation, you’ll need to either head on over to your local branch, or do as I just did and ring them to go through some security checks to get the dormancy block removed, and the account re-activated.

It was all very quick and painless actually, though I managed to grumble all the way through – I didn’t really want to be spending time opening new bank accounts in the first place, and it was another hurdle to deal with. However, it should all be sorted now, and when Virgin Money receive my completed ISA transfer form all should proceed as planned. Fingers crossed!

Goals for August

So, what financial headaches do I plan to inflict upon myself next month?! (You might have noticed I’m struggling with these tasks at the moment!)

  1. Finally make a decision on which funds to use for my stocks and shares ISA
  2. Try to make a bit of extra cash by selling stuff on eBay.

I’d be interested in hearing about the financial chores you’re putting off, or those you’ve finally got around to doing. Were they relatively painless in the end, or as bad as you feared?!

Image: Pixabay: Peggy_Marco

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2 Responses

  1. Sarah says:

    I have a couple of small pension pots that I think I should probably transfer into one but its such a boring task and retirement feels too far away! I’m completely with you on sorting bank accounts and dormant savings, both very unappealing tasks.

    • Sarah says:

      Glad it’s not just me bored to tears by the admin side of tackling these things, my to-do list doesn’t seem to be getting much shorter either! Hopefully blogging about these tasks will keep us motivated, thanks for reading!

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