Cash ISA Interest Rate - Not worth me opening for 09/10

Financial_Savvy

I wanted to open a Cash ISA for 09/10 but I have reviewed some rates and it doesn't seem worth it.

I have an A/L Online Saver Issue 5 paying me 2.52 Net until Oct 2010.

A+L Direct Isa Issue 5 would pay be 2% Gross P.A. AER.

So I guess I keep saving in the Issue 5?

talana

I have an A/L Online Saver Issue 5 paying me 2.52 Net until Oct 2010.

A+L Direct Isa Issue 5 would pay be 2% Gross P.A. AER.

Firstly, why base your decision on that one particular ISA that happens to be paying 2%? Others elsewhere are paying more, and rates will probably start to rise again this year.

Secondly, don't forget to consider the long-term tax free benefit.

Baldur

There are many Cash ISAs offering more than 2.52%, it depends whether you want instant access or can give notice/fix the rate for a period - have a look through this post for the various types of Cash ISA accounts on offer.

Don't forget that the tax-free status of a Cash ISA is ongoing - if you don't use your 2009/10 allowance by April 5th, you lose it (and, potentially, many years of ongoing tax-free interest on it in the future).

C_Mababejive

I agree. The recent inflation figures suggest that savers will be losing big time or at least just drawing even...even in an ISA. Banks and BS are bleeding us dry. Dont give them your money. They will be forced to put up rates soon . Thats why there is a plethora of seemingly attractive fixed deals at present. In a few months time,such deals will be rubbish/average.

red-boxer

The Abbey (now santander), have a 3% postal isa, which is easy access

Baldur

red-boxer wrote: »

The Abbey (now santander), have a 3% postal isa, which is easy access

Only for balances of £9,000+, if you mean the Direct ISA (Issue 3).

C_Mababejive

http://www.statistics.gov.uk/pdfdir/cpi0110.pdf

dazzer101

Bit confused with the transfer of an ISA. Can an existing amount of say 20k go to a different ISA with a higher rate of interest or does the 3.6k rule apply.

Baldur

dazzer101 wrote: »

Bit confused with the transfer of an ISA. Can an existing amount of say 20k go to a different ISA with a higher rate of interest

Yes - the transfer must be arranged by the chosen new ISA provider.

or does the 3.6k rule apply.

No - it only applies to new money being paid into a Cash ISA during the current tax year.