Halifax ISA Intrest Rate Shock

WhiteKnight_2

Hey need some advice on my ISA please.

I was just fully exploring my online account for my ISA with Halifax.

I found the section where it shows my intrest rate over the time I have had the account with the.. The intrest drop has really shocked me and now I want to move my money somewhere I will get the full potential.

Just look at the drop:

01 April 2009 0.50%
01 March 2009 1.00%
01 February 2009 1.50%
01 January 2009 2.00%
01 December 2008 3.00%
01 November 2008 4.50%

Now i know there are regulations such as £3600 only per year, now what do you recommend I do when moving to another ISA, can I move the entire amount within my current ISA to a new ISA and still get the intrest rate from my new account in April?

Any help will be appriciated.

I also want to move my mothers account from Halifax, and as she is over 50 can she now save more than £3600?

I know a few questions here but would be good for some advice.

Thanks

ses6jwg

It's due to the Bank of England dropping the base rate, its the same across the board.

Yes you can transfer to a new provider, DO NOT WITHDRAW THE MONEY, find a suitable account and then fill in a transfer form. Should take around 30 days to move but may be longer.

If you move to an instant access account you should still be able to put in an addtional £5,100 come April, or if it is fixed rate you will still be able to use your £5,100 allowance elsewhere.

WhiteKnight_2

Some of the ISA's paying 4% are fixed and you have to be with them for 4 years, Halifax for example. I dont want to be fixed with them for this length of time.

Should I stay with this account and just hold out until it comes back up.

Or could I wait until March and see what the intrest rates are across the board and transfer to the best ISA? Would that be possible.

Cheers for the Info

Lokolo

Most instant access ISAs won't raise the interest rate back up. You would have to move your money to get a better rate.

WhiteKnight_2

Lokolo wrote: »

Most instant access ISAs won't raise the interest rate back up. You would have to move your money to get a better rate.

Could I wait until March though and transfer before April 2010 and still be eligible for the interest?

Lokolo

WhiteKnight wrote: »

Could I wait until March though and transfer before April 2010 and still be eligible for the interest?

Yes. You can transfer now and still be eliglbe for interest. Interest is worked out on a daily basis. So you can get interest by having money in a savings account for 1 day. Won't be a lot, but there still will be some.

WhiteKnight_2

Lokolo wrote: »

Yes. You can transfer now and still be eliglbe for interest. Interest is worked out on a daily basis. So you can get interest by having money in a savings account for 1 day. Won't be a lot, but there still will be some.

Im wanting to hold out until next year then decide then, my current intrest rate is 0.50% so if I moved to an account in March 2010 with say 3% for example would I get 3% intrest on my full savings in my ISA?

Cheers, just trying to get my head round it.

ginvzt

You would get 0.5% for your money from Halifax until the date of transfer, and from the transfer date (March 2010) you would get 3%, if you find the account that offers it. You would not get the 3% for all the year up to April 2010, only from March (day of transfer).

WhiteKnight_2

ginvzt wrote: »

You would get 0.5% for your money from Halifax until the date of transfer, and from the transfer date (March 2010) you would get 3%, if you find the account that offers it. You would not get the 3% for all the year up to April 2010, only from March (day of transfer).

Thanks ginvzt that answers my question so rather than waiting until March it would be better to find a better account soon as really, do agree?

So from April 09 - Dec 09 I would get 0.5% then say I changed to a new account apying 3% I would get Jan 10 - April 10 at 3%

Thats explained now thanks

Lokolo

WhiteKnight wrote: »

Im wanting to hold out until next year then decide then, my current intrest rate is 0.50% so if I moved to an account in March 2010 with say 3% for example would I get 3% intrest on my full savings in my ISA?

Cheers, just trying to get my head round it.

No. As interest is worked out daily you are currently getting 0.5% daily. If the rate changes to 3% tomorrow, you will get 3% each day that the rate is 3%. You will not get 3% on the whole interest.

Example.

You have £1000
Interest rate is 10% for 6 months. Interest rate is 5% for 6 months.
for 6 months you will be getting 10% and for 6 months you will get 5%. meaning -

£1,000 * 10% = £100. Divide by 2 to get 6 months (as a year is 12 months and that is what I calculated it to). £50.
£1,000 * 5% = £50. Divide by 2 to get 6 months (as a year is 12 months). £25.

Total interest is £75.

WhiteKnight wrote: »

Thanks ginvzt that answers my question so rather than waiting until March it would be better to find a better account soon as really, do agree?

So from April 09 - Dec 09 I would get 0.5% then say I changed to a new account apying 3% I would get Jan 10 - April 10 at 3%

Thats explained now thanks

Yep!

WhiteKnight_2

Thanks for the answers will get my self sorted over the christmas break.

Thanks for the examples hope this helps other people too

Cheers