natiowide isa

k1984

Hello,

I wonder if anyone on here can give me a bit of advice.

I opened up an instant access isa through nationwide on july 2008 to just put away a bit of money every month. If i remember the rate was 4.8%apr?

Anyway i made myself up an excel spreadsheet to see how much interest i would get (calculated on a daily basis of 0.01315%).

I went down to the nationwide yesterday too see that i had only been given £40.77 interest. this seemed quite low. I had calculated it to be about £80.

Does anybody know

1) what the interest rate was on an instant access isa through nationwide last year.
2) Am i doint the calculations completely wrong
3) can the interest rate on your isa change during the year

my deposits were as follows:

£1000 28th July 2008 (account opened)
£500 26th Aug 2008
£400 6th oct 2008
£500 28th oct 2008
£600 8th dec 2008
£600 30th jan 2009

thanks in advance.

K:)

CLAPTON

the nationwide instant acces ISA is a variable rate ISA that has changed 4/5 times since July 2008 and is now 0.5%

Hungerdunger

As a general rule, if you are sure you can lock your money away for at least a year, you will get a better rate if you take out a fixed-rate ISA. The downside is that no one can tell you with any certainty how a variable-rate ISA would perform over the same period, but at least you will be able to calculate how much interest you will earn.

If you are indeed getting only 0.5%, I suggest you find one with a better rate, which will also accept transfers in, and get them to start the transfer process. Do not withdraw the money from Nationwide yourself or it will lose its tax-free status. You could do worse than start here, although there are several other comparison sites.

If you can lock the money away for a year, you should be able to get at least 3%.

evenasus

Was it a variable or fixed rate?

martinman3

In fact, your account is only earning 0.25% AER at present, not 0.5%.

agsnu

k1984 wrote: »

1) what the interest rate was on an instant access isa through nationwide last year.

The rate fell as follows:

1 Nov 08: 4.20%
1 Dec 08: 2.60%
1 Jan 09: 1.5%
1 Feb 09: 1.0%
1 Mar 09: 0.5%
1 Apr 09: 0.25%

2) Am i doint the calculations completely wrong

Well, you didn't take into account the rate reductions, so yes.

3) can the interest rate on your isa change during the year

The Instant Access ISA summary box clearly states that the interest rate is variable.

Of course, there are a number of fixed rate savings accounts. These typically let you avail yourself of a higher rate of interest by agreeing to lock up your money for a longer period. In most cases they don't allow further deposits once they're opened, though.

amcluesent

>In fact, your account is only earning 0.25% AER at present,<

Yikes!:mad: I've got a £17,000 build up over several years in their instant access ISA.

What can I do to get a better rate? Can I transfer the full amount into a 12 month fixed rate ISA with Nationwide.

BTW, I'm assuming interest rates will be on the rise in 2010.

Hungerdunger

amcluesent wrote: »

>In fact, your account is only earning 0.25% AER at present,<

Yikes!:mad: I've got a £17,000 build up over several years in their instant access ISA.

Without meaning to sound arrogant, how can you let this amount of money accumulate without being aware of the amount of interest you are earning? Currently, every percent below what you might be able to earn is costing you £170 per annum.

amcluesent wrote: »

What can I do to get a better rate? Can I transfer the full amount into a 12 month fixed rate ISA with Nationwide.

Spend some time looking for best buys which allow transfers in before you transfer to the Nationwide Fixed Rate ISA. (See my earlier post)

amcluesent wrote: »

BTW, I'm assuming interest rates will be on the rise in 2010.

I don't think many people would have foreseen a year ago that rates would fall to their current levels; so it would be a brave person who would make a forecast for 2010.

Masomnia

amcluesent wrote: »

>In fact, your account is only earning 0.25% AER at present,<

Yikes!:mad: I've got a £17,000 build up over several years in their instant access ISA.

What can I do to get a better rate? Can I transfer the full amount into a 12 month fixed rate ISA with Nationwide.

BTW, I'm assuming interest rates will be on the rise in 2010.

I think your best bet may be the First Direct Cash e-ISA, 3.10% fixed until 30th April 2010, reverts to a lower rate then so be sure to change again.

Halifax direct reward ISA may work for you too, 3% fixed for a year from the time you open it. Same as above, goes to pants rate after the term.

agsnu

Masomnia wrote: »

I think your best bet may be the First Direct Cash e-ISA, 3.10% fixed until 30th April 2010, reverts to a lower rate then so be sure to change again.

Halifax direct reward ISA may work for you too, 3% fixed for a year from the time you open it. Same as above, goes to pants rate after the term.

Since Nationwide's Fixed Rate ISA is 3%, what is the advantage to moving to Halifax?

Also, if you expect interest rates to rise, you could go for one of Nationwide's tracker ISAs which will track any upwards changes in the base rate.

Masomnia

agsnu wrote: »

Since Nationwide's Fixed Rate ISA is 3%, what is the advantage to moving to Halifax?

Also, if you expect interest rates to rise, you could go for one of Nationwide's tracker ISAs which will track any upwards changes in the base rate.

Halifax's is more flexible, can make more than one deposit (unlimited I think up to £3.6k), can make up to four withdrawals, allows transfers in.

Not sure if you can transfer between Nationwide ISAs though. If you can, and you don't need the money and can deposit the full allowance at the start then yeah you may as well stick with Nationwide.

Editted to add: I think that the tracker one may be a really good idea if you expect rates to rise, only issue is you're 'gambling' the interest up until rates do change.