Two,Three and Four Year FR Isa's

okydoky

I am reconsidering my ISA strategy and am thinking about transferring my current ISAs, worth around £20K into a Three or Four Year deal at about 3.75% or 4.25%.

I know the perceived wisdom is that rates will rise but if they do not, then you tie into a decent rate and as someone else pointed out, if you invest at lower levels and rates do not increase by as much as some think, you really are struggling to average out at these levels.

I will not need the cash for at least four years - so what does everyone think??

Lokolo_2

If you don't need access to the money then it's fine to go into a longer term ISA, but there is always the risk of rates going up as you mentioned.
I now have a 5yr Northern Rock stepped ISA, rates are fixed and go up by 0.5% per year, from 3.5% this year up to 5.5% in the 5th year.
You can though get 5% fixes with some long term ISA's (5yr) which give an overall better AER than the one I went for, so don't make the same mistake as me!:o 4yr @ 4.4&% I believe is the best on offer. :j

The gamble with rates going up is something you will have to make your own mind up on, nobody can predict the future accurately so just decide if you want to take the risk or not, some accounts also have easy "get out" clauses so you can transfer when better ISA's become available, it depends on the particular ISA though.

=A-M=

Mickygg

I think the same as you okydoky. I like to lock away for the best rates available now, then if rates do increase you have some comfort at early stages you got the best rate. As with northen rock above you can work out any fixed rate like that, makes it look more attractive.

RayWolfe

Why not do some and some. You have then hedged all your bets.

apt

You need to be wary about fixing for too long near the bottom of the market. However, the longer term fixed rates people took out a couple of years ago have worked out well, as has the 5% five year Newcastle BS ISA from last summer. Longer term fixes also mean you do not lose interest during transfers, which often amounts to a couple of weeks.

cyclonebri1

aaronmanz wrote: »

If you don't need access to the money then it's fine to go into a longer term ISA, but there is always the risk of rates going up as you mentioned.
I now have a 5yr Northern Rock stepped ISA, rates are fixed and go up by 0.5% per year, from 3.5% this year up to 5.5% in the 5th year.
You can though get 5% fixes with some long term ISA's (5yr) which give an overall better AER than the one I went for, so don't make the same mistake as me!:o 4yr @ 4.4&% I believe is the best on offer. :j

The gamble with rates going up is something you will have to make your own mind up on, nobody can predict the future accurately so just decide if you want to take the risk or not, some accounts also have easy "get out" clauses so you can transfer when better ISA's become available, it depends on the particular ISA though.

=A-M=

It was untill last thursday, closed now:mad: Maybe wrong, i recall that being 3 years for 4.4%

$ years looks the only effective rate/period at the moment, just came on here myself to gather the latest befcore I commit :money:

annie42

I thought an isa of mine was fixed until September this year but it matures on 6th April. The building society say I subscribed to it six months after it was first offered. Apparently it's in the terms and conditions so it's my fault but I've not read any posts regarding this so I thought I'd mention it.

cyclonebri1

annie42 wrote: »

I thought an isa of mine was fixed until September this year but it matures on 6th April. The building society say I subscribed to it six months after it was first offered. Apparently it's in the terms and conditions so it's my fault but I've not read any posts regarding this so I thought I'd mention it.

You're quite right, if you fix for 1 year it's fixed from the day the paperwork is accepted, not the tax year end, does it matter to you?? Obviously it does if you misunderstood it, but otherwise not really important.;)

Geoffo_M

aaronmanz wrote: »

I now have a 5yr Northern Rock stepped ISA, rates are fixed and go up by 0.5% per year, from 3.5% this year up to 5.5% in the 5th year.
=A-M=

I looked at the 5yr Northern Rock as well. Problem is that I don't think you can add each succeeding year's allowance to the account, nor does it allow transfers in. So the likelihood is that you will have one stand alone ISA with a maximum of £5,100. Shame

paid4it

okydoky wrote: »

I am reconsidering my ISA strategy and am thinking about transferring my current ISAs, worth around £20K into a Three or Four Year deal at about 3.75% or 4.25%.

I know the perceived wisdom is that rates will rise but if they do not, then you tie into a decent rate and as someone else pointed out, if you invest at lower levels and rates do not increase by as much as some think, you really are struggling to average out at these levels.

I will not need the cash for at least four years - so what does everyone think??

clydesdale bank 5% for 5 years transfers in allowed but only on offer till 30th of april

annie42

Forgive my ignorance but what does Clydesdale mean when they say "up to 5% interest can be earned" on the fixed rate bond isa?