2 year fixed rate halifax ISA Saver......

annie12

Hi, we currently have an ISA with the Halifax (ISA direct reward).
We have just had a letter from the Halifax offering 3.5% if we transfer the money into their 2 year fixed rate Halifax ISA Saver.
Are there any better rates for transfers?
Have had a look but haven't seen anything.

Thanks
Annie

BurnsieUK

can you add/withdraw funds?

Baldur

annie12 wrote: »

We have just had a letter from the Halifax offering 3.5% if we transfer the money into their 2 year fixed rate Halifax ISA Saver.
Are there any better rates for transfers?
Have had a look but haven't seen anything.

It's the average rate being offered on 2-year FRISAs, see http://forums.moneysavingexpert.com/showpost.html?p=4603369&postcount=1

annie12

BurnsieUK wrote: »

can you add/withdraw funds?

No, you can't.

annie12

Baldur wrote: »

It's the average rate being offered on 2-year FRISAs, see http://forums.moneysavingexpert.com/showpost.html?p=4603369&postcount=1

Thanks, I saw that after I posted
I think I will do it then.
The only thing that worries me is the chance that interest rates will rise.

Baldur

annie12 wrote: »

Thanks, I saw that after I posted
I think I will do it then.
The only thing that worries me is the chance that interest rates will rise.

That's always the possibility with fixed-rate accounts, especially longer term ones.

Mickygg

Remember Annie to look at this another way - If you fixed for 1 year you would probably only get 3%. To get the same as 3.5 fixed for 2 years, you would then in a year need to find an ISA paying more than 4% to better this (and probably have to transfer, losing up to a months interest).

Who knows what interest rates will do though, its a gamble.

Have you thought about the M&S ISA fixed for 3 years at 4% but only £100 early transfer penalty? This may suit you better, should rates increase.

annie12

Thanks, I hadn't looked at the M & S one as I didn't want to tie up money for that long.

I'm assuming that I can transfer my current ISA to this new one & open a new one elsewhere for 2010/2011 tax year?

Mickygg

annie12 wrote: »

Thanks, I hadn't looked at the M & S one as I didn't want to tie up money for that long.

I'm assuming that I can transfer my current ISA to this new one & open a new one elsewhere for 2010/2011 tax year?

Yes you can do this.

The M&S one is only a £100 flat fee if you want to move this across to another provider. This is especially good for those with a larger ISA deposit, so you don't have to keep your funds with them for the full 3 years.

For example if you had £20k to put into an ISA, this would earn £700 for the first year with halifax and £800 with M&S. If the rates increased dramatically, with M&S you could then transfer out again after a year and still have the same interest as if you put this into Halifax. This obviously doesn't include interest lost in tranfering to another provider. After the first year you would be better off even after deducting the £100 withdrawal fee.

Food for thought. If you have a smaller balance then the difference is minimal and probably best to go with Halifax as you seem to prefer than one.

F