What’s the deal?
Up to £200 for switching individual savings accounts (Isas) to Interactive Investor, the online stockbroker and financial website. The incentive payment is calculated as 0.5 per cent of the value of the transfer.
Transfers are into the broker’s no-fee stocks and shares Isa, which can be invested in UK and international shares as well as funds. Switches of cash Isas as well as stocks and shares plans are accepted, and there is no minimum value.
The offer is open to new and existing customers, and is available until the end of September.
Is this good?
It’s among the most generous incentives for Isa transfers. To be eligible for the maximum £200, investors would need to transfer tax-free plans worth
at least £40,000.
Share-based Isa providers generally charge from about £10 per line of stock for transfers out, so the incentive cash will offset these exit costs. For cash and fund Isas – which in many cases do not have exit charges – investors stand to make a straight profit by switching to Interactive Investor’s plan.
The broker’s service also has other attractions. Its Isa has no management or administration fees, standard dealing commission is just £10, while a dividend reinvestment (“Drip”) facility charges 1 per cent. Its website also offers active online discussion boards where users can swap tips and investment opinions.
Are there any catches?
Some Isa providers’ exit charges could amount to more than the cash incentive. The deal is also only available for Isas – not dealing accounts.
While the broker’s standard commission is a competitive £10, it does not offer a reduction for active traders. Some rivals have “frequent trader” tariffs as low as £6.
What are the alternatives?
TD Waterhouse, one of the biggest online brokers, is offering a flat-rate £75 cash payment for Isa transfers of £10,000 or more to its service. Investors can qualify for more than one £75 payment if they transfer £10,000-plus Isas from different managers. The broker’s Isa is also fee-free.
iDealing offers a £10 commission credit for each transferred shareholding worth at least £1,000. There is a maximum of £150 in dealing credits for each account type – standard, Isa or self-invested personal pension (Sipp) – that is switched.
Selftrade, which charges an annual fee of £35 plus VAT, reimburses up to £100 of exit costs for investors transferring Isa and dealing accounts to its service.
Killik & Co, an advisory broker, refunds all exit charges on incoming Isa transfers. But it has a minimum dealing commission of £30.
How do I find out more?
www.iii.co.uk/isas
www.tdwaterhouse.co.uk
www.selftrade.co.uk
www.killik.com
