ISA Time - Alliance & Leicester / Barclays. Advice?

glider3560

financequest wrote: »

Done the basic maths. Fixed rate ISA over 2 years (104 weeks)

Provider A. Offers 3.25% on 6th April 2010 and insists 31st May 2011 maturity.
Provider A. Offers 1.25% on 6th April 2011 and insists 31st May 2012 maturity.

Provider B. Offers 3.25% on 6th April 2010, matures 5th April 2011.
Provider B. Offers 1.25% on 6th April 2011, matures 5th April 2012.

Provider C. Offers 1.25% on 6th April 2010, matures 5th April 2011
Provider C. Offers 3.25% on 6th April 2011, matures 5th April 2012.

ISA transfers typically take 4 weeks, during this time, interest may not be paid.

Scenario 1.
Invest in fixed rate 1 year ISA for 2010/2011 with provider A, then re-invest in a further fixed rate 1 year ISA for 2011/2012 with provider A.
ISA taken out on the 6th April 2010 matures on 31st May 2011 (59 weeks after start of tax year) irrespective of date account opened.Funds cannot be moved until after that date. This leaves 45 weeks remaining to end of tax year 2011/2012.
5100 invested 6th April 2010 @ 3.25%
Up to 31st May 2011, interest 3.25/100*5100*59/52 = 171.56
Total ISA now worth £5271.56
Tax year 2011/2012 rate drops to 1.25%, so
Up to 5th April 2012, interest 1.25/100*5271.56*45/52 = 52.02
Total ISA now worth £5323.58

Scenario 2.
Invest in fixed rate 1 year ISA for 2010/2011 with provider A, then transfer to provider C on 1st June 2011 for a fixed rate 1 year ISA for 2011/2012. After 4 week delay, that leaves 41 weeks remaining in the 2011/2012 tax year.
5100 invested 6th April 2010 @ 3.25%
Up to 31st May 2011, interest 3.25/100*5100*59/52 = 171.56
Total ISA now worth £5271.56
Up to 5th April 2012, interest 3.25/100*5271.56*41/52 = 123.23
Total ISA now worth £5394.79

Scenario 3.
Invest in fixed rate 1 year ISA for 2010/2011 with provider B, then transfer to provider C on 6th April 2011 for a fixed rate 1 year ISA for 2011/2012.After 4 week delay, that leaves 48 weeks remaining in the 2011/2012 tax year.
5100 invested 6th April 2010 @ 3.25%
Up to 5th April 2011, interest 3.25/100*5100*52/52 = 165.75
Total ISA now worth £5265.75
Up to 5th April 2012, interest 3.25/100*5265.75*48/52 = 157.97
Total ISA now worth £5423.72

I am going down the scenario 3 route.

See my post on this thread which shows your calculation is incorrect:
http://forums.moneysavingexpert.com/showpost.html?p=31733715&postcount=15