first direct Cash ISA

danuk3

Hello... I hope you guys can help me out please!

I have had an ISA with first direct for many years now and each year add to it as they let you keep the same ISA instead of opening up a new one.

It now has a balance of £13,000 meaning when I've finished adding this year's allowance it'll be over £18k.

On their website it says:

"2.75% AER (2.72% tax-free) fixed until 31 August 2012 before reverting to our standard variable rate, currently 0.20% AER (0.20% tax-free)"

I've asked them whether this 2.75% AER applies to the whole amount or just what I put in this year (I'm hoping it's the whole one!)

After 31 Aug 2012 however if it goes back to 0.20AER this is really appalling considering by then I would have over £18k in there...

What can you guys suggest as I'm not really ofay with the best thing to do.

thanks

Lokolo

It will 99% be the whole amount.

I am not sure what you want us to suggest? As Aug 2012 is 15 months away....

Lokolo_2

even 2.75% isn't a great rate, there is better out there!

Halifax offer 3% (3.2% for existing customers) and accept transfers in, so you could transfer your First direct ISA to them now to get a better rate! (assuming that there is no penalty for leaving FD early)

If you are able to lock away the money for longer periods? there are fixed rate ISA's paying up to 5% AER for a 5yr term.

As Lokolo says, theres still plenty of time until your 2.75% rate drops!

Loughton_Monkey

Almost certainly you have been receiving 0.2% for ages. Their 2.75% rate is only for ISA's opened since 14th February. If what you say is correct, yours was opened years ago, and will have been at 0.2% (or whatever standard rate applied) for several years. You will be able to work this out from interest statements.

You should check this out (just to confirm it). After that, simply open one with another provider and move the whole lot. Quickly.

Baldur

As Loughton Monkey says, most of FD's recent ISA offers (over the past couple of years, from memory) have offered a decent rate for the first year, like many other providers, after which the interest plummets to their 'standard' variable rate; it's highly likely that you have been receiving 0.2%, or whatever their standard rate has been at any particular time, from the first anniversary of opening your ISA account but confirm this with FD.

To transfer your ISA, check out this post, which shows all of the current Cash ISA 'best buys', including those that accept ISA transfers and select a new provider that offers the type of account that meets your needs (variable/fixed rate, etc.), pays a better rate & accepts ISA transfers. Complete the chosen new provider's ISA transfer form and let them arrange the transfer from FD, you must not do this yourself.

Empty_pockets

Just signed up for one this morning.

Baldur

Empty_pockets wrote: »

Just signed up for one this morning.

Make a note & be prepared to transfer it when the rate reduces next August 31st or you may have to change your username to "Emptier pockets".....