Halifax or Santander

elfie87

Hi all,

Having looked at the top rate ISA accounts on this forum I just had a query about whether to go for the Santander or Halifax one. I am a Halifax current account holder and so I'd get 3% AER, but should I be worried by the fact that this rate is variable? I like that the Santander ISA is guaranteed to remain above the base rate, but with a slightly lower AER of 2.8% for me, does anyone know if its worth it?

Many thanks in advance!

opinions4u

elfie87 wrote: »

Having looked at the top rate ISA accounts on this forum I just had a query about whether to go for the Santander or Halifax one.

Given the service reputation of Santander, proceed with caution if you turn that way.

I am a Halifax current account holder and so I'd get 3% AER, but should I be worried by the fact that this rate is variable?

Probably not. They have had other "Reward" accounts that have been both ISA and non-ISA and have retained competitive rates for the period of the Reward. Of course that only speaks for the history of it, and you should be aware of the low rate this account moves to in 12 months time.

That said, their ISA Promise states: "All cash ISAs will be available to all customers, new and existing" so if they reduce the rate on this one and launch a new "Super Dupa Reward ISA" you can change to it. If they simply manage the rate down you can jump ship as there are no penalties.

I like that the Santander ISA is guaranteed to remain above the base rate, but with a slightly lower AER of 2.8% for me, does anyone know if its worth it?

Their guarantee is only for a year as well. "For 12 months the rate will remain 2.35% above Bank of England base rate". I suspect the VAT rise means that a BofE rate increase is less likely. I also suspect that the part-state owned banks will probably move their headline rates up in line with the first BofE rate change because there will be political pressure to do so.

elfie87

Thanks ever so much Opinions4u! I was just reading some posts on here about Santander's customer service when you pointed this out! I'll definitely stick with Halifax. Interesting points regarding VAT and political issues - you certainly know your stuff! Many thanks