Will ISA rates get worse after the ISA season?

WitNick

For the tax year 2010/2011 myself and my wife will be saving around £10,000. Therefore the ISA allowance is enough to cover us so I am not particularly worried about using the 09/10 allowance.

However. I have been looking at the Santander 3.5% Flexible Cash deal. Do the rates on ISA's generally get worse once you come out of the ISA season therefor making it sensible to open the ISA now even though we don't need this years allowance?

Batchy

its not when you open it, its when you add the cash... if you can add the cash now, ie 7200 between you and your wife, you never know what you can add next year etc, your better off having more available , than none at all, as you never know what your position will be like and if you have to draw it out temporarily, if you know what I mean, this means you can draw some out and top it back up, as you would still have an allowance left for 2010-11

Sanzai

Might get worse, or might get better. Impossible to say for sure, and given that ISA transfers out of the Santander Flexible ISA are simple enough to do, it makes sense to go ahead and open it now if you have the money. If something better comes up you can transfer it into that next year. If the other account doesn't allow transfers in, then you can always withdraw the money and then enter it as 'new money' in the next tax year.

However, if you don't make use of your allowance this year then it becomes trickier to do this - you can always withdraw your money, but if you have paid into the Santander ISA then you are not allowed to subscribe 'new money' to an ISA with another provider in the same tax year.