Is it time to fix for longer?

Pastyman_2

There don't seem to be many attractive 1 year fixed rate ISAs at the moment. With rates supposedly staying low for a while, it might be the right time to fix for a bit longer. The Northern Rock 3 year stepped ISA looks tempting. Does anyone else think it is a reasonable offer?

ses6jwg

Any more than a 1 year fix is in effect betting against the Bank of England.

When interest rates do rise, they will rise quickly.

I would not fix more than 1 year personally.

Mikeyorks

I second that. My remaining cash fixed rate ISAs are at 5.7% and 6% respectively. Time to fix for > 1 year is when rates move up a bit ..... now is not the time.

TCA

I think it's down to each individual as to what return they're prepared to accept on their savings. And whether they want to keep transferring between providers on a regular basis. My personal view is that rates will be low for up to 2 years, so if you fix for 3 years (as in the OP), then if I'm right, you'll gain for 2 years and perhaps lose out in the 3rd year. Then you can fix again at better rates. It's all a guessing game though. My 1 year fix is up in February, so I'm hoping for some tempting offers as the tax year-end approaches. I will fix for a number of years if I get a decent rate.

Merry Xmas to all

TCA

MrBeans

Mikeyorks wrote: »

I second that. My remaining cash fixed rate ISAs are at 5.7% and 6% respectively. Time to fix for > 1 year is when rates move up a bit ..... now is not the time.

That's a good rate! Was that taken out recently or is it still there from the good old days?

Pastyman_2

I'm glad for Mikeyorks that he's enjoying the luxury of 6%; it surely wasn't a 1 year fix though. I've got a 1 year 5% fix maturing next week so I'm hoping for anything vaguely near that rate.
What makes ses6jwg think that rates will soar once they start to rise?

ses6jwg

Pastyman wrote: »

I'm glad for Mikeyorks that he's enjoying the luxury of 6%; it surely wasn't a 1 year fix though. I've got a 1 year 5% fix maturing next week so I'm hoping for anything vaguely near that rate.
What makes ses6jwg think that rates will soar once they start to rise?

I took out a 1 year fixed rate bond with Leeds BS in August 2008 at 6.3% gross

Lokolo_2

ses6jwg wrote: »

I took out a 1 year fixed rate bond with Leeds BS in August 2008 at 6.3% gross

I fixed with Kaupthing Edge (ING now) for 3 years @ 7.67% in August 2008 :j

ses6jwg

aaronmanz wrote: »

I fixed with Kaupthing Edge (ING now) for 3 years @ 7.67% in August 2008 :j

Aye but you were lucky it didn't disappear into oblivion.

Lokolo_2

ses6jwg wrote: »

Aye but you were lucky it didn't disappear into oblivion.

I know, i know! I'm just glad that ING are still honouring the old rate, it will be a while till we can see rates like that again :rolleyes:

Mikeyorks

Pastyman wrote: »

I'm glad for Mikeyorks that he's enjoying the luxury of 6%; it surely wasn't a 1 year fix though.

That's true. All my cash ISAs were fixed for the max of 4 or 5 years at the time they were taken out.

But the way cash has gone - I've put the more recent ISAs (self + OH) into S&S Funds. The £7.2k I put in mid-April 09 + the £3k top up mid Oct (now being of that certain age) has increased by 32.08% (the OHs by 27.85%) - as at close 24.12.09 - so I'm not rushing back to cash.

However - the 4/5 year fixes start to mature from this next April and I'll be keeping those in cash ..... so I'm hoping the rates start to improve sooner rather than later. I certainly don't see ISA rates staying around the 1 year rate of 3% for the next 2 years. However the fairly guaranteed influx of extra funds, as everyone's annual entitlement goes to £5.1k in April, will likely have a short term depressive effect on rates?