Barclays current ISA TFR question

Junier

I hope someone can answer this for me, my case is I currently have a cash isa with Barclays, the rate is rather crepe and want to open a new one on the 6th April with a better provider.

However, the one I am looking at which is the A&L / Santander 3.5% one doesnt accept any tfrs into it from older isas.

My question is simply can I cease all payments into the old Barclays isa then carry on to open a new one with the new provider?

TIA :T

Sanzai

Yes, as long as you wait until 6th April as you mention. They won't accept transfers, but new money can go into the A&L/Santander Flexible ISA.

rb10

See here.

It depends on whether or not you have paid money into the Barclays ISA this year, so in point 3, you'll be either in section b, c or d.

That post explains what your options are, depending on what your current situation is.

robbieroy

I too have existing cash ISAs with Barclays which command poor rates (some as low as 0.1%). The solution I have come up with is to transfer them to the Nationwide 3-year fixed rate ISA (4.4% AER). At the start of the new tax year I will take out the new Golden ISA Issue 3 with Barclays at 3.1%.
Hope this helps
RR

rb10

robbieroy wrote: »

I too have existing cash ISAs with Barclays which command poor rates (some as low as 0.1%). The solution I have come up with is to transfer them to the Nationwide 3-year fixed rate ISA (4.4% AER). At the start of the new tax year I will take out the new Golden ISA Issue 3 with Barclays at 3.1%.
Hope this helps
RR

A better solution would be to open a Santander or A&L Flexible ISA at 3.5%.

Assuming that rates stay the same, this would be worth an extra £20 over the course of the year, if you have the maximum £5100 in the account.

robbieroy

rb10
Thanks for the information on the Santander or A&L Flexible ISA at 3.5%.
I will have a look at this. Most of my financial dealings are with Barclays, so I guess it is a "loyalty thing".

RR

robbieroy

Hi rb10
I have checked out both the Golden ISA issue 2 with Barclays and the A&L Flexible ISA at 3.5%
After 1 year it appears a a quick glance that:
- Golden ISA issue 2 with Barclays includes a fixed rate bonus of 1.00% gross. The bonus is payable for 12 months from the date you open your account, after which the rate will reduce accordingly (ie to 2.5%)
- A&L Flexible ISA After 12 months your account will pay a variable rate, currently 0.50% AER tax free (variable).
In the case of there being poor AERs on ISAs next year then it would be worth putting the cash into the Barclays one and leaving it there.
As often happens, I do not give myself an annual financial MOT so I often forget the check the ISA AER after a fixed period.
RR

Sanzai

One issue with the Barclays ISA is that the interest rate is variable - only the 1% bonus is guaranteed. Doesn't this technically mean that the rate could drop to just 1% within a month of opening the account and still fit with their obligations?

The A&L/Santander flexible ISA on the other hand guarantees a rate of at least 3% above the Bank of England Base Rate for 1 year and to not drop below 3.5% within this first year, so you have that safety net.

I guess other, more experienced people can correct me, but given my limited past experiences and the wording of each of the accounts here, I would not choose the Barclays Golden ISA over the A&L/Santander flexible ISA. Barclays might leave the 'non-bonus' rate at 2.5% after one year as they did with the previous Golden ISA, or they could very well reduce it to 1% within a month of you opening the account - if you are just going to open the account and forget about the money, I would suggest you are showing too much faith in the bank...

robbieroy

Thanks Sanzai - that seems to be good advice.
RR

Junier

Thanks everyone, I have paid into the current ISA for 2009/ 2010 so looks like I will just have to cease paying into it before April then I can get a decent one with the A&L or Santander!!!

Think I might even take out the cash from the current ISA and deposit it into a monthly high earner saving account with barcs:T

Sanzai

Junier wrote: »

Thanks everyone, I have paid into the current ISA for 2009/ 2010 so looks like I will just have to cease paying into it before April then I can get a decent one with the A&L or Santander!!!

Think I might even take out the cash from the current ISA and deposit it into a monthly high earner saving account with barcs:T

Well bear in mind that once the money is withdrawn from the ISA account it will lose its tax-free status. That's why, if you can afford it, it is generally considered best to keep building your ISA savings as much as possible (i.e. making maximum use of your annual ISA allowance). Might be best to wait and see what other ISA accounts are offered over the next month or so which allow transfers in, and go that route for your current Barclays ISA money?