Choices Choices ?????

Legacy_user · 8 April 2005 at 4:58PM

I have approx £6100 in a Halifax ISA which will mature on 19/04/05 giving me an extra £300 approx in interest. I also have another £3000 to add for the 2005/06 tax year
Halifax have told me my best option with them is an ISA Saver Direct fixed at 5.15%. I have worked out this will earn me approx £482 in interest in 05/06 but the Abbey Postal will give me £500. This is only £18 more and I'm wondering if it is worth it transfering to them as there will undoubtedly be a delay of a few days during the transfer and I'm not sure what rate of interest will be paid by either side during that period.

My 3rd option is to transfer to the Abbey Choices at 5.5% even though I know the interest is not immeadiately reinvested in the ISA. This is an option for me because I know I will not have an full £3000 to invest in 2006/07 and so can use the interest to top that up.

Can anyone offer any guidance and does anyone know if Halifax apply an exit charge if I choose to transfer to the Abbey?

EDIT: Just found out that Abbey Choices 5.5% ends tomorrow so have to scrap that idea as my Halifax ISA doesn't mature until 19/04/05

Kazza242 · 8 April 2005 at 9:30PM

Pam17 wrote:

Halifax have told me my best option with them is an ISA Saver Direct fixed at 5.15%.

Hi Pam17,

The Halifax ISA Saver Direct is not a fixed rate product, but a variable rate ISA offering 5.15% interest. See here at the Moneysupermarket website and here's a link to the Halifax interest rate page. It looks like the Halifax advisor you spoke to might have been referring to the Fixed Rate Halifax ISA Saver, which also pays 5.15%.

As interest rates may go up by 0.25% after the General Election, I'm not sure it's a good idea to fix, especially at just 5.15%. You could opt for the variable rate ISA Saver Direct at the same rate. That way if BOE base rate does increase you're less likely to miss out on an increase in the interest rate you're ISA is earning.

The Abbey ISA is a good account, especially as it comes with a guarantee to pay BOE base rate + 0.25% - although, it does tend to pay above it's guarantee. Whether or not you decide to go for the Abbey ISA really depends on whether you don't mind the delay while they open the account. If you do opt to open an Abbey ISA, it is better to open it in an Abbey branch, as it's much quicker than doing it all via the post.

System · 9 April 2005 at 8:49AM

Thanks Kazza. I had seen both those sites myself after contacting the Halifax but during my conversation with the Halifax rep he frequently referred to both the Fixed Rate ISA Saver (5.15% penalties of 180 days interest if there are any withdrawals) and the Fixed Rate ISA Saver Direct (5.15% no penalties for withdrawals). He also mentioned their normal Variable Rate ISA (4.15%

). I just thought the "Fixed ISA Direct" was better because there were no penalties.

To be honest I wasn't sure about variable or fixed as my maturing Halifax ISA only paid £4.70% for 2004/05 although I can't remember what the variable rate ISA choice was with Halifax last year when we were sorting things out so it might be 6 of 1 and half a dozen of the other so to speak with regards to final payout.

I thing we may go with Abbey since it's rate starts higher than the Halifax fixed anyhow but basically it's a gamble whatever way we go and if interest rate go down instead of up we'll be saving more on our mortgage.

derrick · 9 April 2005 at 10:59AM

KENT RELIANCE Building Society have a fixed 5.3% until 31/5/06 and a fixed 5.35% until 31/12/06 Geo tel No: 01634 848944

Early withdrawals subject to 100 days loss of interest on amount withdrawn, not suitable if you can`t last the term.

Choices Choices ?????

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free