A+L ISA worth switching?

xnetco

Hello,

As you already know A+L dropped their rate. Is it worth actually moving again and worth the hassled? I'm concerned that as soon I move they'll drop their rate too.

What do guys all think?

Tim

masonic

Exactly which A&L ISA are you referring to? The direct ISA issue 2 is still at 5.2% for accounts opened before 11/04/2006 according to their website. For accounts opened after that date, the rate does not appear to have changed either.

xnetco

Sorry, I have the direct ISA which has just dropped to 4.75%. Is it worth switching?

masonic

xnetco wrote:

Sorry, I have the direct ISA which has just dropped to 4.75%. Is it worth switching?

I think you are talking about the Direct ISA Issue 1, that dropped to 4.75% in early May? One option is to move to Bradford & Bingley (5%). Their rate seems to be consistently good, so it's worth considering if you want to avoid the hassle of transferring again soon.

lisyloo

Is it worth actually moving again and worth the hassled?

I think it depends on how much money you have. in the ISA.
I think you need to know what you are gaining before you decide.
What I do is to calculate the annual gain and then consider whether it's worth it.

For example £20K at 0.25% is £50.
Whereas £3K at 0.25% is £7.50 over a year.

Personally I would moved for £50 but not for £7.50 so it depends on where you personal "hassle threshold" is.
Mine is somewhere between £20 and £30, but not everyone is the same.

Also bear in mind that you will lose a few days interest on the WHOLE amount for a few days whilst the "cheque is in the post". (yes I know it's old fashioned but that's how it works).
While you cheque is in the hands of the post office it won't be gaining interest.