Moving ISA from NSI to Halifax - Good Idea?

littly_kitty

I have £7,000 in an ISA with NS&I. The interest payment is very low so I was thinking about moving it to the Halifax's ISA Direct Reward. I haven't made any ISA payments for this tax year, so I was thinking of making the full £5,100 payment at the same time as the transfer.

As I already have a current and savings account with the Halifax, I would get £384 in interest for doing the above.

Is this a good idea? I've done lots of research, which says it is. However, I am always a bit wary when you get something for nothing. Surely I must be sacrificing something to get the £384. Are there any hidden things I need to be vary of?

Also, on April 7th, would it be a good idea to put another £5,100 into the Halifax ISA for the next tax year, or am I better of waiting until March 2012 to make a decision.

blueberrypie

The Halifax Direct Reward ISA is instant-access, so if a better alternative came along, there'd be nothing to stop you transferring your money again. If you are able to fund it for 2011/12, again, there's no reason why you shouldn't do that at the beginning of the tax year and benefit from the interest it earns, unless you have something else to do with it that will earn you more than 3.2% net.

BTW the cash ISA allowance for 2011/12 is £5340.

(And you realise the £380ish interest would be for a year, yes? You don't earn it by just having the funds in the ISA at the end of the tax year.)

david78

Seems like a good idea to me. Transfer now. You will get interest from the day you make the application. Then on April 6 pay in your £5340 for next year. Don't wait for next March as you will lose 11 months tax free interest.

Blueberrypie is spot on. The £384 interest is what you get if you put the money in for 1 year. BTW its not money for nothing, its your interest on the "loan" you are giving them.

Andy7856

I have just set one up online. I need to visit branch with my ID (as not a HFX customer already) which I will do on Tuesday. I am not putting a penny in, but moving in 3 x ISA from the Post Office for previous years. My fixed rate has expired and I am down 3% to 0.25% (I dont want to tie my money up again). I phoned the Post Office and said 0.25% was not very competitive and they bascally said I am welcome to leave. I took their advice!!! HFX here i come, when that ends I am sure I will have the same conversation with them.