Alliance and Leicester Direct ISA Issue 4 low rate!

wiimad

Hi all i need a bit of help i currently have 10k in Alliance and leicester Direct ISA Issue 4 which from 1st dec is paying 3.55% gross AER. I dont need the money for up to 6 months if not a little longer. Would i be better closing it and moving to a Fixed rate savings account like Halifax websaver at 5.5%( 4.4%AER) for 6 months. Also If i did close the A&L account will i get the interested ive earned from when i opened the account in april 08 without any loss of interest as ive not been credited any interest since i opened the account.

Many thanks

masonic

When you close the account, you'll get interest paid up until the date of closure.

Do you not feel it might be better off in the long run to keep the tax free status of your money, or do you plan to use it in the near future? Also, a lot of fixed (and variable) rate accounts are going to drop over the next few days, so you may need to bear that in mind when deciding what to do.

wishiwasarichgirl

I wouldn't take it out of the ISA as you'll lose the tax-free status and won't be able to put it all back into an ISA later if the rates go up again.

Dunno where you should put it but I'll be having a look around now too as I have a similar amount in that account, if anyone knows of any ISAs which allow transfers in with a better rate than that I'd love to hear of them!

wiimad

At some point this will help towards a deposit on a bigger house( within the next year).How long have Halifax websavers been going at the current rates?. Ive not been keeping a close eye on my money lately

masonic

wiimad wrote: »

At some point this will help towards a deposit on a bigger house( within the next year).How long have Halifax websavers been going at the current rates?. Ive not been keeping a close eye on my money lately

The fixed rate websavers were last changed around the 20th. The websaver reward (the fixed 5% one that allows extra deposits and some limited withdrawals) ends this Monday.

Halifax is slashing its variable rates on Monday, so it wouldn't be surprising to see fixed rate offers withdrawn and replaced very soon. Remember that you need to open and fund a variable rate websaver with your deposit before you can open one of the fixed rate accounts, so it will likely take you a few days to sort that out.

wishiwasarichgirl

[STRIKE]
also don't forget that with the A&L ISA you are getting a 1% bonus on top of the normal rate until may 09 making the rate 4.55
[/STRIKE]

edit, just looked at the A&L site again, the 3.55 includes the bonus - how rubbish is that!!

wiimad

yep, Is it still a good idea to have the tax free status on 3.55%, rather than moving to a none ISA saver account?. I dont supose i would be able to shift the ISA to another ISA in this tax year as i only opened this one in april?

wishiwasarichgirl

nat west are offering an ISA rate of 5.98% if you transfer in an amount between £9K - £18K, a lady in one of their branches tried to tell me about it yesterday, but I said I wasn't interested as I thought my A&L rate was fixed at 6% or whatever it was when I opened it :rolleyes:

ps, you can shift an ISA as often as you like, as long as the one you are changing to allows transfers in. (What you can't do is open a new ISA and fund it with new money if you have already used your allowance for this year)

masonic

You can transfer an ISA as soon and as many times as you like, so yes, you could transfer into a better ISA.

If you are going to use the money soon, then there is no reason to maintain its tax free status if you can find a taxed account that still pays a higher net rate than the best ISA you can find.

fullstop

wishiwasarichgirl wrote: »

I wouldn't take it out of the ISA as you'll lose the tax-free status and won't be able to put it all back into an ISA later if the rates go up again.

Dunno where you should put it but I'll be having a look around now too as I have a similar amount in that account, if anyone knows of any ISAs which allow transfers in with a better rate than that I'd love to hear of them!

If you have between £9000 and £14000 a RBS ISA is paying 5.9% including a 1.75% bonus for 1 year. This rate is only for transfers into RBS, not new money. Better check again on Monday to see if the rates have gone down.

masonic

wishiwasarichgirl wrote: »

nat west are offering an ISA rate of 5.98% if you transfer in an amount between £9K - £18K, a lady in one of their branches tried to tell me about it yesterday, but I said I wasn't interested as I thought my A&L rate was fixed at 6% or whatever it was when I opened it :rolleyes:

That rate is dropping to 4.6% on Monday.

Edit: The RBS rate above is also dropping to about 4.5%.