Isa Rates From Monday [7th April]

crafty_Blue · 4 April 2008 at 3:44PM

I'm setting up a couple of ISA's for next yr [regular payments 12 x 300], and intended to spend tomorrow sorting out best buys etc.

I was just wondering if come Monday, ie next financial yr, will there be a new spate of interest rates to attract new investors, or will existing products just 'roll-over' ??

KTF · 4 April 2008 at 4:04PM

I would say that the products for the next tax year have already been announced.

Penniesmakepounds · 4 April 2008 at 6:13PM

Last year I took out a fixed rate Isa's with B & B as soon as they came out for the new tax year. Felt slightly deflated when after a short while someone else brought out something a little better - so jumped the gun a bit. Not that there's a great deal of difference profit wise, but overall you have to pick all the accounts that will maximise that hard earned cash so that the end justifies the means. Then you have to look at maturity accounts and see what they are paying and if they are worth hanging on to or could you do better elsewhere? So there are other considerations as well. These financial institutions have got you whatever way you turn really.

quote=crafty Blue;discussion/838563]I'm setting up a couple of ISA's for next yr [regular payments 12 x 300], and intended to spend tomorrow sorting out best buys etc.

I was just wondering if come Monday, ie next financial yr, will there be a new spate of interest rates to attract new investors, or will existing products just 'roll-over' ??[/quote]

cornucopia_2 · 5 April 2008 at 12:58AM

Hi there, I was thinking about these isa rates too crafty Blue, and agree with you KTF, i think they are all set for the early part of next year already. Given the BoE is likely to reduce base rate on thursday and other banks/building societies will follow suit lowering their savings rates, it may be a fair bet to jump to the best deals before next thursday. I've been looking at fixed rate deals, as base rate is likely to fall in the medium term. It seems the best out their, backed by the BoE itself, is northern rock at 6%, also allowing transfer in of previous year's allowances. What do you reckon?
If this is jumping the gun a little, Penniesmakeponds, there is usually a colling off period. I did the same as you last year with an Egg ISA and used this to transfer to an A&L ISA at 8.3%!

Hungerdunger · 5 April 2008 at 2:05AM

KTF wrote: »

I would say that the products for the next tax year have already been announced.

Some have; some haven't.

Principality BS have told me in the local branch what the new rates will be on 7th April, but are still advertising the old rates (upto 5th) on their website. Skipton BS say they'll announce new rates on 7th and "Please come back then to read all about our great new range."

I've been told by Nationwide that their current fixed rate ISAs will continue from 7th, but obviously they can't say for how long.

Any_Thing_For_A_Buck · 5 April 2008 at 12:34PM

Considering the ABBEY are offering an ISAs at 10% AER, I would have assumed :money: would have mentioned this?? It's the best rate around.

The only thing what concerns me is that you have to invest the same amount into a Guaranteed Growth Plan. What is this?? and How much can you save with this??

Also I thought the idea of an ISAs is to open it at the start of the tax year in order to receive the maxium saving. How much can you really save, opening an ISAs for 07/08 now.

Cheers

TomsMom · 5 April 2008 at 1:26PM

Any_Thing_For_A_Buck wrote: »

Considering the ABBEY are offering an ISAs at 10% AER, I would have assumed :money: would have mentioned this?? It's the best rate around.

The only thing what concerns me is that you have to invest the same amount into a Guaranteed Growth Plan. What is this?? and How much can you save with this??

Also I thought the idea of an ISAs is to open it at the start of the tax year in order to receive the maxium saving. How much can you really save, opening an ISAs for 07/08 now.

Cheers

You can usually find the answers to questions like this by going to the website concerned and clicking on the link to the product.

http://www.abbey.com/csgs/Satellite?c=GSProducto&cid=1139301119515&pagename=Abbey%2FGSProducto%2FGS_InfProducto

It's an investment with a certain element of risk to it. You are guaranteed to get your capital back when you put it in a Guaranteed Growth Plan but they don't guarantee the return, or interest, you will receive. They quote "a minimum return at the end of the term" and "There is the potential to earn more than the guaranteed minimum depending on the performance of the FTSE 100 Index." So you have to decide if you are willing to accept the "minimum return" if the market doesn't perform particularly well.

Also note "It is available either as a 3.5 or 6 year investment." and " if you close the plan early you may get back less than you paid in."

We were offered something similar last year and hubby, who's a bit more on the ball than me, quickly worked out that the return could be a lot lower. We wanted a guaranteed return rather than a bit of a gamble so didn't go ahead with it.

born_again_saver · 5 April 2008 at 1:34PM

Any_Thing_For_A_Buck wrote: »

Considering the ABBEY are offering an ISAs at 10% AER, I would have assumed :money: would have mentioned this?? It's the best rate around.

The only thing what concerns me is that you have to invest the same amount into a Guaranteed Growth Plan. What is this?? and How much can you save with this??

Also I thought the idea of an ISAs is to open it at the start of the tax year in order to receive the maxium saving. How much can you really save, opening an ISAs for 07/08 now.

Cheers

The very fact that you have to invest money into the Guaranteed Growth plan means that this ISA is not being considered as a true best buy, although the rate itself is admittedly tempting.

Every year there is a rush both to open an ISA before the tax year ends, and to open an ISA as soon as the new tax year starts. I think anyone can save the headaches of a rush by getting an ISA opened at least a couple of weeks before the April deadline.

The trouble is I think people react to all the publicity at that time and suddenly realise they should put their money in while they can. The implication of them not doing so is that they lose the tax free allowance for this entire tax year forever, hence the panic to open one now. They have to be people who were either unaware that they could open an ISA earlier in the year due to poor financial literacy, or they panicked last year, maxed out the ISA at that point and had nothing left over to put into this year's allowance so didn't bother to open another.

It is far better IMO to open an ISA early in the tax year, adding to it gradually if you don't have the full amount to save to begin with.

Although it's beneficial to open an ISA as early as possible in the tax year, it surely won't make much difference to wait a couple of weeks until the April 6th rush subsides, assuming your money is in a savings account paying a reasonable rate of interest elsewhere. You may also find some better rates emerge in those weeks.

The only exception to this is if you're looking to invest the full amount into a fixed rate ISA for 2008-9, as with the BoE interest rate likely to be lowered on Thursday, it may be better to try and bag the rate before then to avoid rate reductions.

born_again_saver · 5 April 2008 at 1:54PM

crafty_Blue wrote: »

I'm setting up a couple of ISA's for next yr [regular payments 12 x 300], and intended to spend tomorrow sorting out best buys etc.

I was just wondering if come Monday, ie next financial yr, will there be a new spate of interest rates to attract new investors, or will existing products just 'roll-over' ??

I would look around again on Monday just to see if anything new and better is on offer before committing.

caliston · 6 April 2008 at 4:53PM

The other question for variable rate ISAs is what to do if there's a BoE rate cut on Thursday? Wait around to see what everyone does (which could take a month) or snap up something now in case it's no longer offered to new customers (as has happened with some non-ISA variable accounts recently)?

MiserlyMartin · 6 April 2008 at 7:05PM

I'm going to stick my neck out and predict that the BOE will leave rates on hold on Thursday. Inflation is still too high and the upside risks to inflation are still there, even by Brown the clowns fiddled figures in his CPI basket.