5 year fixed rate ISA at 5% - Newcastle BS!

edinburgher

Hi guys.

Noticed this morning in an article on the Times website that Newcastle Building Society are offering a 5% cash ISA fixed until 2014! Sorry if this has already come up, but it seemed too good a deal not to share.

It can be opened with £1, withdrawals are possible (please note, 90 days notice required) and transfers in are possible.

I don't have any spare cash at the moment as I'm paying down my debts, but suspect that this will come in incredibly handy when my GF and I start saving for our house deposit next spring :j

My personal opinion is that interest and savings rates will go up by the end of next year (green shoots will arrive eventually), but if they don't I'm still guaranteed a fair rate on my money. After all, it's only £1!

http://www.newcastle.co.uk/savings/5yearfixedrateisa

23rdian

Looks a good deal although be aware of recent ratings downgrade

Newcastle Building Society:Long-term IDR downgraded to 'BBB+' from 'A-'; placed on RWNShort-term IDR downgraded to 'F2' from 'F1'; placed on RWNIndividual rating downgraded to 'C' from 'B/C'; placed on RWNSupport rating: affirmed at '3'Support Rating Floor: affirmed at 'BB'Senior unsecured notes downgraded to 'A-' from 'A'; placed on RWN Subordinated notes downgraded to 'BBB' from 'BBB+'; placed on RWN

edinburgher

Thanks 23rdian. My personal opinion on the ratings agencies is that they're hardly a super intelligent force for good. Far too many big mistakes made over the last couple of years and a lot of downgrades etc. that seemed semi-political in nature.

avalanche_3

:mad:edinburger: pointless opening with £1 and hoping to add extra money next spring because the terms state extra money can only be added before this issue closes which may be in the next week or so if previous special offers are to go by. This rate is way better than any other on the market for new money and for transfers of existing money.:D

I have moved my wifes £30000 to this account today.:T

Innys

Hi

I don't think this is a good product at all.

Interest rates could quite easily get to 5% or higher by the end of next year. If one were to tie in their money to this account for five years, they may soon end up regretting it.

I once tied my money into a HBOS 2 year fixed rate ISA. Interest rates rose one year in and I lost out for the remaining 12 months.

If you prefer certainty, this is the account for you. If, however, you want to maximise your income, I don't think this the right account.

I

agsnu

Innys wrote: »

nterest rates could quite easily get to 5% or higher by the end of next year. If one were to tie in their money to this account for five years, they may soon end up regretting it.

You seem to have missed the key point that withdrawals are permitted subject to 90 days notice on this account...

Innys

agsnu wrote: »

You seem to have missed the key point that withdrawals are permitted subject to 90 days notice on this account...

90 days notice means the interest for that year is, effectively, 3.75%.

ING are offering a variable rate ISA paying 3% with no restrictions on withdrawals.

It's down to personal preference, but I would prefer the flexibility of instant access for a slightly lower rate of interest.

beniamino

This seems too good to be true. Does anyone have a clear understanding of whether '3 months notice' means '3 months loss of interest'?

avalanche_3

Innys: You are still missing the point, this account pays 5% tax free and you can withdraw or transfer to another ISA without losing interest if you give 90 days notice. So you will get 5% on any amount you had in your account that year even if you take all but £1 out in the 5 year period but leave the account open for the 5 years.

This interest is about 2 % more than the other top ISA'S.

I have moved money to this ISA to get an extra 2% on £30000, giving £600 extra interest for the year, not to be sniffed at! :j

Lets hope the other banks follow and up rates to more than 5% over the next year but this could take some time. I for one can't afford to wait just incase.

When interest rates are on their way up above 5% then I will look at giving my 90 days notice and moving the money but it will be nice to receive the 5% till that time.

The ING account is variable and in the past they have been renowned for reducing their rates after people have opened an account.

23rdian

Tempted so far and agree with the strategy above. But do bear in mind that the last too good to be true rate was from a certain provider beginning with I
/scepticism

edinburgher

avalanche wrote: »

:mad:edinburger: pointless opening with £1 and hoping to add extra money next spring because the terms state extra money can only be added before this issue closes which may be in the next week or so if previous special offers are to go by.

So bloody sick of the banks and their stupid conniving ways. Even with reading through the terms and conditions *twice* I managed to miss this. Keeping my money in the mattress.