Isa question

Inforapennyinforapound

I have a mini cash isa containing a few thousand pounds with HSBC( i think the interest rate is 4.75% but a bit confusing on their web site and it may be 4.65%)..anyway i am considering a transfer to A & L at 5.2%......However two posers.....1/ A & L could easily drop the rate by .1,.2,.3 per cent once they have bagged a few new customers(which is what hsbc did when i transferred to them at 5%)....2/ HSBC pay the interest MONTHLY as opposed to ANNUALLY.
Is monthly interest better? I cant get my head around the figures at the moment!
My feelings are that i may as well stay put at present..i know its all ifs and buts...i would welcome any other thoughts.Thanks.

david78

You need to forget about monthly/annually interest and just focus on the AER.

The best account is the one with the highest AER.

You may lose a few days interest if you transfer and you would need to allow for this. In the longer term, it makes sense to transfer to the higher AER account.

ReportInvestor

Hi ifapifap,

If A&L drop their rates by more than 0.5% in any one year, on top of any Bank of England rate cuts, then they have to notify customers under the banking code.

This tends to keep providers half honest, as the bad publicity can be too much hassle.

JEC

Also, the A&L rate is apparently guaranteed until 30/4/07.

grumbler

JEC wrote:

Also, the A&L rate is apparently guaranteed until 30/4/07.

No. Only 0.7% bonus is guaranteed. The background rate is not guaranteed.

mjfusent

I wanted to transfer my existing cash ISA's into this deal but it seems its not that easy. After speaking with them it seems that on the web the only way to do it is to start a new cash ISA this year, and then transfer your old ones into it (don't want to do that as I'm already doing a maxi this year) OR go into the branch, no good to me as its 15 miles away.

flossy_splodge

I think if you look elsewhere on these threads you'll find that you do not have to put money in to open a new mini cash isa. So you can open one merely for the purpose of transferring in. Then your existing investments into mini or maxi isa this year is unaffected. x