ISA - Fixed Term or Variable?

funkey_monkey

I'm currently looking into switching my ISA from the NS&I Direct ISA (1.3%) to another account. Should I be opting for a fixed or variable rate ISA?
Should I opt for:
Var 3.1%:
http://www6.marksandspencer.com/pages/default.asp?PageId=VRS&Product=IS
or fixed at 3.1%:
http://www.firstdirect.com/savings/cash-eisa-overview.shtml


Or do you know of anything better?

Slightly confused

Thanks.

Baldur

Your choice - if you think that interest rates are likely to increase over the next twelve months, a variable-rate product may be advantageous but could also reduce; if not a guaranteed rate, like that offered by First Direct will ensure that you know exactly what rate you will receive for the next year.

See this post for some of the best of the various 'flavours' of Cash ISA currently available.

ray123

Fixed - rates are not likely to increase too much in the next 12 months. You will not see rates of 6% (for an ISA) for a long time.
Fix it for a year and then see what happens.
As Baldur states, with a fix you know the rate, but a var on the other hand can change at the lenders discretion.

DiggerUK

funkey_monkey,
Me and Mrs.D utilised BS savings for most of our long term savings, the bulk went in from 2000.
In all that time we never did better in fixed than variable rates. They seemed to average out much the same.
The only time we benefited was last year with fixed rate Isa's. But 2008 was an "unusual" year.

Now we have emergency funds in instant access A/C's and Premium Bonds.

You also need to take into consideration the current volatility, I would only feel happy with instant access so that options are left open, especially as rates only vary by about 1%

Good fortune.

alared

After trying to set up a Natwest E-saver to get an E-ISA,which has taken a month.
Natwest has now dropped the interest rate to 2.5%.
I really only want to transfer my existing ISA so this morning I printed off the M&S transfer form and posted it.
3.1% with a 1% bonus `til 21st April next year.
Simple and straightforward unlike NatWest.

natman

I have opened up an Halifax Reward ISA at 3%, been generally happy with it, you can transfer in previous funds. In addition as a top up for next year, I have also opened up a Halifax regular saver saving upto £500 a month at 4%.

I think barclays are still tops at teh min with 3.61% but that is for new money only!
Happy saving