Northern Rock 3.5% 1 year fixed ISA

leanneee

I really like the look of this ISA but I am a bit wary as I was stung when opening one at University (I think they opened a stocks and shares ISA for me when I just wanted a cash ISA)

Anyway, I tried to open the IF ISA a few months back but they required a authorised copy of my passport which I was not able to provide so it was never opened.

Can I open this ISA in branch or would it need to be done online? I looked at the site but couldn't see it - has anyone done this in branch? I could go into the branch on Saturday with my passport etc and get this done there and then instead of having to wait for them to send the letter asking for proof of identity.

If I opened this and put in all of this years limit (£3600) and then opened a new one in the new tax year with however much I can afford when this one matures in Dec 2010 can this then be transferred into the new one and not impact my limit or would I have to wait til the new tax year i.e. Apr 2011 before I could transfer both of these into a third ISA?

I hope this all makes sense - as I said, I'm very new to all this!

fullstop

You can open another ISA next April when the new tax year starts, and still open one for this year, but you will have to keep it open for a year if you go for the fixed rate IF product, some providers accept transfers but they are mostly the variable rate ones.

You can put £3600 into your cash ISA this year and £5100 from next year.

Have you looked at the Northern Rock ISA which is paying a better rate?

leanneee

fullstop wrote: »

You can open another ISA next April when the new tax year starts, and still open one for this year, but you will have to keep it open for a year if you go for the fixed rate IF product, some providers accept transfers but they are mostly the variable rate ones.

You can put £3600 into your cash ISA this year and £5100 from next year.

Have you looked at the Northern Rock ISA which is paying a better rate?

Thanks for the quick reply fullstop! What I meant was I would be trying to open the Northern Rock one and keep it for the year but once the rate is up i.e. December would I be able to transfer it to the current year's ISA which I assume (based on what you have said) would depend on the ISA I chose next tax year or would it be better to leave it til Apr 2011 and transfer them both - but again I guess I would need to ensure that I opened an ISA that year that accepts transfers! Is that right? :huh:

fullstop

leanneee wrote: »

Thanks for the quick reply fullstop! What I meant was I would be trying to open the Northern Rock one and keep it for the year but once the rate is up i.e. December would I be able to transfer it to the current year's ISA which I assume (based on what you have said) would depend on the ISA I chose next tax year or would it be better to leave it til Apr 2011 and transfer them both - but again I guess I would need to ensure that I opened an ISA that year that accepts transfers! Is that right? :huh:

Yes , it depends on the provider , but it is better to open one this year and have a look next year at what is on offer.

al4x

i was thinking of going for this [its my first isa] but am also unsure whether its better to wait for something better?

or is one of the high paying bank accounts better for sums between 1000 to 3600?

RodianRomanovich

I'm considering transferring my fixed rate cash ISA from 07/08, 08/09 which is currently ~6.5k fixed with first direct at 3.0% (no penalties to withdraw) to this Northern Rock one. I'd like to get my ISAs away from FD if possible which would give me the flexibility to move my 'current account', this year's subscription is a partially filled Reg Saver ISA with FD at 7% which I obviously won't move till it matures in the spring.
I don't know if the 0.5% extra and loss of a certain degree is flexibility is worth it, also will better deals come out in the spring when the ISA market picks up? I like having my fixed term and tax year aligned for ISAs but is there any real advantage in this?
Any advice welcome, I know that ultimately the decision is mine and people can't predict interest rates come April.

The_Enforcer

al4x wrote: »

i was thinking of going for this [its my first isa] but am also unsure whether its better to wait for something better?

or is one of the high paying bank accounts better for sums between 1000 to 3600?

You could open up the A&L Premier Direct Current Account, which would earn you 6% gross on £2,500 - for a lower rate taxpayer the equivalent of 4.8% in an ISA. On face value, this is better than all the instant access or short-term fixed rate options for that sum of money.

However, in the long-run it's generally considered that it's better to use up your ISA subscription each year before considering alternative saving options. This is because the top ISA deals will usually beat their savings equivalents once the tax is deducted. Special accounts like the one above - it only lasts a year - or high interest rate taxable regular savings accounts may not be repeated and there may be rising tax rates in the future, in which case the ISA option would perform even better in comparison.

A hypothetical example: you have £3,600 saved and invest £2,500 of this firstly in A&L and then the remaining £1,100 in an ISA. After a year the A&L deal ends, but there is no longer an equivalent - so you decide to put this money in an ISA. You have also got another £3,600 saved ready to invest, but the maximum you can put in is £5,100 (from April 2010), so your tax-free total is £6,200 and £1,000 has to go in a savings account.

Alternatively, if you put all of the first £3,600 in an ISA, then all of the second £3,600 can go in an ISA as well, giving you a tax-free total of £7,200.

A crude example, but you can see how if these approaches were repeated year-on-year then the latter scenario would leave the saver with a much bigger tax free fund.

P.S. I have recently opened the A&L current account myself, but only after having first used up my ISA subscription.

JamesPond

TattyBear wrote: »

Does anyone know the address to send completed Northern Rock ISA application forms?

Sounds a daft question, but there's no address on the application for completed forms. Typical publically owned company I suppose.

The online application form I printed has this address:-

Freepost,
Northern Rock plc
E-Savings
NEA 3780
Newcastle upon Tyne
NE3 4ZE

al4x

The_Enforcer wrote: »

You could open up the A&L Premier Direct Current Account, which would earn you 6% gross on £2,500 - for a lower rate taxpayer the equivalent of 4.8% in an ISA. On face value, this is better than all the instant access or short-term fixed rate options for that sum of money.

However, in the long-run it's generally considered that it's better to use up your ISA subscription each year before considering alternative saving options. This is because the top ISA deals will usually beat their savings equivalents once the tax is deducted. Special accounts like the one above - it only lasts a year - or high interest rate taxable regular savings accounts may not be repeated and there may be rising tax rates in the future, in which case the ISA option would perform even better in comparison.

A hypothetical example: you have £3,600 saved and invest £2,500 of this firstly in A&L and then the remaining £1,100 in an ISA. After a year the A&L deal ends, but there is no longer an equivalent - so you decide to put this money in an ISA. You have also got another £3,600 saved ready to invest, but the maximum you can put in is £5,100 (from April 2010), so your tax-free total is £6,200 and £1,000 has to go in a savings account.

Alternatively, if you put all of the first £3,600 in an ISA, then all of the second £3,600 can go in an ISA as well, giving you a tax-free total of £7,200.

A crude example, but you can see how if these approaches were repeated year-on-year then the latter scenario would leave the saver with a much bigger tax free fund.

P.S. I have recently opened the A&L current account myself, but only after having first used up my ISA subscription.

thats very interesting.. to throw in more, the isa is notice and the current account, obv not..hmmm

im split.. gonna have to look at this one

The_Enforcer

Yeah, it's certainly not a scenario where one size fits all, particularly where factors such as how likely/often access to the funds will be necessary and whether money to be invested is a lump sum or monthly installments or both. In the short-term, whether you are over or under 50 years old is also a factor in your decision.