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ISA Time - Alliance & Leicester / Barclays. Advice?
Comments
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How would i go about gaining a transfer form as i've never seen a Coventry branch before & i assume it's only in Coventry?? Even if it isn't, there certainly isn't one near me.
Post? However, the scenario you mention wouldn't happen anyway because, if you're transferring away from the Coventry, the transfer form you need to complete would be from the company you're transferring to, so it wouldn't come from the Coventry.0 -
Ahh thanks, i thought you needed one from the place you're transferring FROM. That clears that up
Would the experts say in this case i'm better going fixed at Coventry then or instant access with Barclays/A&L, bearing in mind i don't necessarily need to touch it for 12-24month??0 -
I too looked at Coventry 1 year fixed rate ISA (currently 3.25%). Their blurb says 1 year fixed ISA matures 31st May 2011. I rang Coventry today, and asked the question "If I invest £5100 today 8th April 2010, does it mature on 8th April 2011 or 31st May 2011 ?. Answer, you cannot touch it until 31st May 2011. So if I decide to move to a higher paying ISA provider next tax year, I would lose a minimum 7 weeks interest and possibly much more interest. I told them that this seemed to be a cynical ploy to deter ISA moves. Think I will keep looking.0
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After trolling the web, it looks like many of the ISA providers also insist on the 31st May maturity date !, is this some kind of financial loophole that favours the provider ?0
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financequest wrote: »After trolling the web, it looks like many of the ISA providers also insist on the 31st May maturity date !, is this some kind of financial loophole that favours the provider ?
Interesting you say this - I too have noticed the 31st May. These banks and BS's advertise 1 year, but then do like to extend this by a few months..... bit crafty.
On another note I too have just opened an A&L flexible ISA - very easy to open and within an hour I have been emailed my account details.
Does anyone know if I need to wait for the confirmation letter which explains how to use the account before I can pay in to this ISA? I would like to pay into this now as I know how long letters can sometimes take.....
Thanks0 -
Hmm, this is a bit of a concern then.
Are you saying that you get interest until 31st May (i.e. MORE than 12 months) or do you only get 12 months interest BUT you've got to keep it in there until 31st May (i.e. you get ripped off a bit)??? As it makes the difference.
Bit of a downer if a lot of others are doing this too.
For someone quick/good with figures, would it be worth opting for the Coventry one which will mature at the end of May, or would the individual be better off opting for Barclays/A&L at a lower rate, but you can transfer out of there next April??0 -
Assuming that the Coventry BS advisor I spoke to was not talking tosh (not impossible), then this scenario raises numerous questions. I may invest £5100 in the Coventry ISA @ fixed rate 3.25% on 9th April 2010 for tax year April 6th 2010 to April 5th 2011. Coventry only allows movement of these funds on 31st May 2011. At that time I am over 7 weeks into the following tax year, not counting any lengthy delays to process swop to alternative provider. If Coventry drop the rate to 1% on 6th April 2011, and I decide to move my ISA on 31st May 2011 to another provider offering 3% for 6th April 2011 to 5th April 2012, how does this affect me ?. I need to speak to them again to clarify. BTW, of the 4 providers asked sofar, none were able to/or willing to explain the 31st May clause !.0
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Why aren't they willing? Surely there's no good reason for them to not answer you??
If you're asking via phone, they can just hang up on you. I'd say the best bet is to go in branch & speak to someone & when/if they clam up, just say you're not leaving until they answer your simple question.
Personally, i don't think i can be faffed with the hassle. I'll look at Barclays/A&L.0 -
Done the basic maths. Fixed rate ISA over 2 years (104 weeks)
Provider A. Offers 3.25% on 6th April 2010 and insists 31st May 2011 maturity.
Provider A. Offers 1.25% on 6th April 2011 and insists 31st May 2012 maturity.
Provider B. Offers 3.25% on 6th April 2010, matures 5th April 2011.
Provider B. Offers 1.25% on 6th April 2011, matures 5th April 2012.
Provider C. Offers 1.25% on 6th April 2010, matures 5th April 2011
Provider C. Offers 3.25% on 6th April 2011, matures 5th April 2012.
ISA transfers typically take 4 weeks, during this time, interest may not be paid.
Scenario 1.
Invest in fixed rate 1 year ISA for 2010/2011 with provider A, then re-invest in a further fixed rate 1 year ISA for 2011/2012 with provider A.
ISA taken out on the 6th April 2010 matures on 31st May 2011 (59 weeks after start of tax year) irrespective of date account opened.Funds cannot be moved until after that date. This leaves 45 weeks remaining to end of tax year 2011/2012.
5100 invested 6th April 2010 @ 3.25%
Up to 31st May 2011, interest 3.25/100*5100*59/52 = 171.56
Total ISA now worth £5271.56
Tax year 2011/2012 rate drops to 1.25%, so
Up to 5th April 2012, interest 1.25/100*5271.56*45/52 = 52.02
Total ISA now worth £5323.58
Scenario 2.
Invest in fixed rate 1 year ISA for 2010/2011 with provider A, then transfer to provider C on 1st June 2011 for a fixed rate 1 year ISA for 2011/2012. After 4 week delay, that leaves 41 weeks remaining in the 2011/2012 tax year.
5100 invested 6th April 2010 @ 3.25%
Up to 31st May 2011, interest 3.25/100*5100*59/52 = 171.56
Total ISA now worth £5271.56
Up to 5th April 2012, interest 3.25/100*5271.56*41/52 = 123.23
Total ISA now worth £5394.79
Scenario 3.
Invest in fixed rate 1 year ISA for 2010/2011 with provider B, then transfer to provider C on 6th April 2011 for a fixed rate 1 year ISA for 2011/2012.After 4 week delay, that leaves 48 weeks remaining in the 2011/2012 tax year.
5100 invested 6th April 2010 @ 3.25%
Up to 5th April 2011, interest 3.25/100*5100*52/52 = 165.75
Total ISA now worth £5265.75
Up to 5th April 2012, interest 3.25/100*5265.75*48/52 = 157.97
Total ISA now worth £5423.72
I am going down the scenario 3 route.0 -
Barclays is by far the easier to open an account with. It takes seconds over the phone or online (providing you have a Barclays current account), or in about 20 minutes if you need to go into a branch. In both instances the accounts open immediately and you can deposit money straight away. In my experience the service is usually quite good. AND remember that the 'bonus' is smaller on the Barclays than A&L account: in 12 months only 1% disappears from the Barclays rate whilst at least 2.7% will drop from the A&L one. This potentially is in your benefit if you forget to transfer out of Barclays after 12 months or any transfer is delayed.
On the other hand, you cannot deny that A&L at the moment pays marginally better, and also has a guarantee on the interest rate (but just for 1 year). But should the base rate move up I doubt Barclays won't pass it on, but of course in theory they could choose to hold it back. Santander's service (and A&L) is generally thought of as diabolical, and I wouldn't be surprised if they experienced delays next year as a rush of people transfer out of this account once the rate drops off a cliff.
If rates stay exactly the same, the difference is £5.10 if you invest the full allowance from day 1. Personally, I'd rather sleep at night and go with Barclays.
OK, sorry but I have to disagree.
I opened the A&L and it was very easy, quick and sorted all on line. I haven't transferred so I won't suggest anything about what it will be like next year.
However, the Barclays rate is variable and the only guarantee is on the bonus of 1% whilst the remaining 2.1% is variable and could reduce. Having had an awful lot of experience with Barclays over many years I doubt very much if they would increase the rate paid if base interest rates rise.
The A&L on the other hand is guaranteed not to fall below 3.2% during the 12 month period and is guaranteed to rise should the base rates go up (it is guaranteed to track at 2.7% above the BoE base rate).
If you want to fix your rates that is an entirely different matter but for me the choice between A&L and Barclays for an instant access cash ISA over 12 months is a no brainer, it has to be A&L.
SpigsMortgage Free October 2013 :T0
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