First Direct to launch 6.25% mini cash ISA

deemy2004

blinko wrote:

i went in there got application forms and came back the next day to hand them in and they had withdrawn the product from the market ! one can only imagine how un happy i was at that moment.

and in my fury i ended up taking out a 4 year fixed 5.6% bond which seems like a decent idea now but to miss it by a day

A tip -

You need to keep your eye on the money market rates i.e. the 1 year interbank rate, as the fixed rate offers tend to quickly follow these. Last year these peaked in June, and by start of Sept had gone from 5.4 to about 5.18, which suggested a trend reversal - Time to panic and hit those fixed rate offers hard before they were revised lower.

The trend to date has been down to 4.8 in early Jan. BUT NOW the worm is turning... with rates back about 5% suggesting that its not worth fixing at current rates, as a better fixed rates are just around the corner

Oh and the probability for a base rate rise is also increasing though I still think that it will be just after the election.

Hence the cahoot 6.25% is probably an opening shot in a trend that will span maybe 6 months of providers gradually uping their rates in anticipation of the next base rate rise. Cahoot are also betting on this upward curve which will likely last 8 months until the direction of the subsquent cycle becomes clearer.

Bob_Frapples_3

...are Cahoot doing 6.25% on an ISA too...?

Caped_Avenger

isasmurf wrote:

Hmm, inside knowledge Caped Avenger? You seem to know a bit about it and are located in the same City as FD... any heads up to it's launch date?.. or does 2+2=5 and you have nothing to do with FD.

Well, perhaps, but i'm not telling you anything that's not freely available to fd customers (or non-customers, for that matter) anyway.

Launch date is this Monday, the 21st, as already stated.

Reaper

I assume that First Direct (unlike YBS) will accept ISA transfers from Monday too. Or does anyone know any different?

Bob_Frapples_3

Yes, they'll take transfers but (and there's always a but) only up to 3 grand

although...if the 6.25% is available 'til October then I guess you can get £3k in this year and another £3k in after 6 April....

kinesin_2

Does anyone yet know the T&C regarding transfer out? I.e is it going to cost?

Milarky

Bob_Frapples wrote:

Yes, they'll take transfers but (and there's always a but) only up to 3 grand

although...if the 6.25% is available 'til October then I guess you can get £3k in this year and another £3k in after 6 April....

I can't be sure [until Monday] of course, but I've just looked at their site, and their current mini cash ISA is 'CAT' standard - meaning without additional restrictions - so that, unless the promotion is coinciding with the introduction of a non CAT standard product, it too would have no restrictions on transfers in.

BTW you can transfer in any whole or part subscriptions from non-current tax years [i.e. up to 2003-04 only] whilst any subscription from this tax year [2004-05] will have to stay where it is for now. But come April 6th you then could transfer in that bit also.

As regards any 'new' subscription made after April 6th [the allowance for 2005-06, in other words] that can be subscribed straight to First Direct, I must assume, but could not be transferred 'out' from there at [say] the end of the 8 months promotional rate period until the following tax year [April 6th 2006] - whereas the rest of the money could be moved immediately.... all very confusing!

[Also, restrictions may apply to your current ISA on transfers out if it is non CAT standard]

Reaper

Well the FD ISA details are up on their web site.

I can't see anything saying they accept transfers but I'll phone up later and check.

Milarky wrote:

BTW you can transfer in any whole or part subscriptions from non-current tax years [i.e. up to 2003-04 only] whilst any subscription from this tax year [2004-05] will have to stay where it is for now.

Are you sure? According to the First Direct ISA T&C they say:

You can transfer all the funds paid into your mini cash ISA in a current Tax Year to a different Account Manager at any time provided that they agree.

loobs40

How long on average do transfers from other cash isas take when opening up a new one? I was thinking of moving one of mine into the First Direct one but only if its not a lot of hassle and only if I dont end up losing loads of interest in the meantime

Reaper

OK, I got an answer by phone and then found it on the web site too.

Transfers can not be made from an existing first direct mini cash ISA. first direct's mini cash e-ISA has a maximum subscription limit of £ 3,000. Transfers made into the e-ISA (from mini cash ISAs held elsewhere) are limited to £ 3,000 plus, if current tax year’s subscriptions are being transferred, any interest earned on that subscription.

So you can only transfer £3000 before April 5th and another £3000 after (plus interest earned if it is from this year's subscription).