First Direct to launch 6.25% mini cash ISA

ED

isasmurf + grumbler - interesting to see your thinking plotted out, above.

isasmurf wrote : "say I have £1000 to invest. After 12 months with [...] First Direct, however, with an AER of 6.25% I would expect £62.50 for a full year and half that if I left after 6 months, so that would be £31.25. But I do not get half of that, I get less. I actually only get £30.80." So, £3,000 would earn approx £92.40.

My simplistic calculation of last week seems about right, then? £3,000 invested 6 April '05 in FD's e-ISA would earn approx £92.32 after 6 months :-

6 April '05 £3,000.00 opening balance
6 May + £15.20 int. = £3,015.20
6 June + £15.27 int. = £3,030.47
6 July + £15.35 int. = £3,045.82
6 Aug + £15.42 int. = £3,061.24
6 Sept + £15.50 int. = £3,076.74
6 Oct. + £15.58 int. = £3,092.32

ie total interest (pre-tax) in 6-month period : £92.32. This is based on each month being 1/12th yr, not precise nr. of days per month.

isasmurf

grumbler wrote:

Neither FD nor A&L calculate interest annually! Even if FD pay interest annually they still calculate interest on daily basis. The calculations below are for monthly interest, but as you wrote above, difference is very small.
With AER 6.25% you can expect £1000*(1.0625^(6/12)-1)=£30.77 for the first 6 months.
With AER 5.40% you can expect £1000*(1.0540^(6/12)-1)=£26.65 for the first 6 months.

I never said either did calculate it annually. Yes, banks do calculate it daily, but A&L pay it annually, therefore you don't get the effects of compounding as you do with FD who pay it monthly.

grumbler wrote:

Now I give over trying to convince you… Let’s agree to differ. I think nobody around follows us already.:beer:

First thing we've agreed on - to differ that is! Cheers :beer:

katskorner

I just spoke to First Direct about transferring my ISA to the e-ISA and they said that I could only transfer £3000 of it. Not only that but I couldn't add to it in subsequent tax years either as the maximum balance allowed on the account is £3000.

Decided to look elsewhere as I find this rather restrictive and not worth the hassle.

ED

Yes, that's what First Direct told our family (as shared on MSE, a couple of weeks ago).

ISA alternatives are listed here :

http://forums.moneysavingexpert.com...5#post420045#35

katskorner

ED wrote:

Yes, that's what First Direct told our family (as shared on MSE, a couple of weeks ago).

ISA alternatives are listed here :

http://forums.moneysavingexpert.com...5#post420045#35

You link isn't working?

ED

sorry, seems to have been automatically truncated - it is here :

forums.moneysavingexpert.com/showthread.html?p=420045#post420045#35

Jim02

katskorner wrote:

I just spoke to First Direct about transferring my ISA to the e-ISA and they said that I could only transfer £3000 of it. Not only that but I couldn't add to it in subsequent tax years either as the maximum balance allowed on the account is £3000.

So are you saying the the maximum amount paid into the ISA can never exceed £3k?

I opened the FD ISA last month (tax year 04/05) and paid £3k into it. I also want to pay money into it in this tax year -- are you saying I can't do this?

Prompt clarification would be appreciated as first payment of this year is going in tomorrow!

Cheers

J

katskorner

Well yes that is what they told me this morning. Ihad completed the online application but phoned to clarify the transfer and that is when they told me £3000 was the max allowed account balance. They said it had been done this way because the interest rate was so high.

Please feel free to ask them yourself as I don't want to mislead. I am only passing on what they told me.

Bargain_Rzl

katskorner wrote:

Well yes that is what they told me this morning. Ihad completed the online application but phoned to clarify the transfer and that is when they told me £3000 was the max allowed account balance. They said it had been done this way because the interest rate was so high.

This doesn't sound quite right to me.

I now have £6000 in mine (£3000 paid in last week, and £3000 paid in this morning). No error messages appearing on my account. I even phoned to check, last week, that it would be OK to pay my 2005/06 allowance in as soon as 6th April came around - and they confirmed that this was OK.

There has been discussion (earlier on this thread, I believe) about the fact that the maximum they allowed as a transfer in from a previous year from another provider was one year's allowance, that's £3000 plus interest. But I checked and double checked by phone that I could pay this year's allowance in, and they said it was fine...

Tiggercat_2

Just spoken to FD about the transfer issue!!!!!! They told me that I could only transfer last years allowance plus interest but I wouldnt be able to use this years allowance when I opened the account!!!!. Then she said they werent accepting any more transfers and that I could then open a new Cash ISA account for this years allowance. Confused? I know I am. Anybody opened an account this week and transfered their existing account to them?
So in effect I think she is trying to say that I could for instance transfer £3150 into a new account but wait I cant as they are not accepting transfers.
So that leaves me with opening a new account for this year and depositing the full £3000 limit.

Wow.............................................