Lloyds 2 yr ISA

kph100

Hi

Considering the Lloyds 2 yr fixed ISA at 3.1% for £30k plus.

Either that or 2.6% on the Halifax variable rate.

What do people think will happen to interest rates in next two years ?

Michael_Corleone

kph100 wrote: »

Hi

Considering the Lloyds 2 yr fixed ISA at 3.1% for £30k plus.

Either that or 2.6% on the Halifax variable rate.

What do people think will happen to interest rates in next two years ?[/QUOTE]

They will either go up, or down or stay the same ...

Are you with Lloyds? Have you considered using 21K to fund a trio of Vantage accounts (4%)? You could then put the remainder in the eSavings, along with the interest (2.5%).

ultrawomble

Michael_Corleone wrote: »

Have you considered using 21K to fund a trio of Vantage accounts (4%)? You could then put the remainder in the eSavings, along with the interest (2.5%).

I have a feeling that the OP might want to maintain the tax-free nature of their money.

Regarding the OPs question, the 160 day penalty on a 2 year ISA seems a bit steep - any early break, even late into the 2nd year, will give you less than the Halifax variable currently at 2.6%.

kph100

Yes I still want to keep the funds within the ISA wrapper , as although rates are low at present on ISAs this will change.

They will either go up, or down or stay the same ..!!!!

not very helpful !!!

I was after any educated ideas.
I know rates will go up soon enough, but within the next two years ?
Is the government cost cutting goin to be deflationary enough ? to reduce the current 5.3% RPI etc etc

ultrawomble

kph100 wrote: »

I was after any educated ideas.
I know rates will go up soon enough, but within the next two years ?

I don't know where the rates will go or be in 2 years time - crystal ball anyone?

All I did was point out that if you invest in the Lloyds ISA and the rates go up, it will cost you more in lost interest (capital even) due to the stiff break rate to move your money to a better paying ISA than if you were to put it into the Halifax variable (assuming that its rate does not fall).