Smile Cash ISA

A question about : Smile Cash ISA

Just received an email from Smile. I had not realised that there are 2 rates of interest depending on whether you have a current account with them.

8th March 2004 interest rates, Bank of England Base Rate - 4.00%
mini cash ISA if you don't have a smile current account 3.50% gross / AER tax free
mini cash ISA if you do have a smile current account 4.25% gross / AER tax free

As the interest on your account remained unchanged and therefore did not benefit from an interest rate increase, we would like to remind you, as part of our commitment to you under the Banking Code, of the options you have available:

- leave your money where it is;
- open a smile current account if you have not already done so and benefit from the special rate available on your mini cash ISA account. This is subject to status. We reserve the right to decline any application. Please note that all smile current account holders are required under the terms and conditions of the account to credit Ј1,000 or a regular payment to their smile current account each month - please refer to the terms and conditions by visiting https://www.smile.co.uk/current.html and selecting 'tariffs, t&cs';
- switch your funds to another mini cash ISA provider, to avoid any loss to your tax benefits. We can help you do this. Please send us a secure message stating that you wish to transfer your ISA by visiting https://www.smile.co.uk and logging into smile banking;
- close your account and withdraw all the money without charge or notice. If you do this rather than transferring the money to another mini cash ISA provider, you will not be able to open a mini cash ISA with another mini cash ISA provider in the same tax year. You may wish to seek advice from your Financial Adviser prior to making a decision to close. Please send us a secure message stating that you wish to close your ISA by visiting https://www.smile.co.uk and logging into smile banking.

It appears that I've been a bit slow on this one and should be changing to another provider. I have not seen this two-tier syatem mentioned on this board.

Is anyone else aware of this situation?

Best answers:

• My advice would be switch to the Abbey Postal ISA
• I too received this email and am now looking at other ISA's that are available. Ihave one question though - sorry if it's a stupid one!
  The email says you can transfer your funds to another ISA, does this include all the money that I've put in over the past 4 years or just the money from the last tax year?
  Sorry but I'm not too hot on the rules of ISAs.
  Also any suggestions as to good alternatives would be great (will look into the Abbey Postal ISA). Am preferably looking for ISAs I can access on the internet.
  Cheers
  Jo
• don't worry, after a bit of browsing I have found the answer in other posts - this is a great site, glad i've found it.
• Yes, I did know there are two tiers but I have a smile current account anyway...
• Yes, I knew too.
  I have a Smile current account but my ISA is not with them, but I am considering transferring it to them ;D
• I opened my Smile current account as a "savings" account for my business so I could get easy access to the cash if I really needed it, but it would be tucked away sufficiently so I wouldnt be tempted to dip in when I felt the urge to spend!
  So really all I do is pay the money into the current account then transfer what I want into the ISA, thus getting the extra interest because I have both accounts.
  Seems to work OK!
• I opened a Smile current account just to get the higher rate on my Cash ISA. Must admit I felt a touch of guilt when they sent me a mountain of documents which I knew I would never use! Still, it's their own fault for discriminating against savers who have a current account elsewhere!
  Andrew.