Banks to cut cash ISA transfer times

The maximum time taken to transfer cash ISAs between providers is to be cut from 23 to 15 working days following a review of the transfer process carried out by the industry.

Banks have also agreed that interest will start to accrue no later than two days after the funds have been received from the old provider.
 
The new arrangements, which build on best practice guidelines introduced by the industry in 2008 and in consultation with the Office of Fair Trading (OFT), come into effect from 31 December 2010.

Banks' performance for meeting the new transfer timescale will be monitored by the British Bankers' Association and a summary of the results provided to the FSA.

A new, customer-friendly version of the current transfer guidelines has been published on the BBA, BSA and TISA websites today (29 June).

Customers will also receive more information in future.  Banks have committed to show interest rates on cash ISA statements in time for the 2012 ISA ‘season' and from July 1 this year all customers with a balance of more than £500 will receive pre-notification when a bonus or introductory interest rate ends if the bonus rate has applied for six months or more.

Eric Leenders, BBA executive director for retail banking, said: "This is a clear example of how the industry has been listening to the concerns of customers and consumer organisations and we broadly welcome today's report by the OFT.  The guidelines the industry produced two years ago have helped to drive transfer times lower and these new industry commitments will bring added benefits to customers.

"We've also taken the opportunity to review existing practices and will monitor the banks' performance against the new target.  We have already started to look at ways in which the process can be made even faster, including how supporting data can be transferred electronically."