Santander or Regular Saving ISA?

mmctear

Hi all,

I've been a lurker for the past couple of years whilst being a student and now I've graduated I finally have some cash to save.

I've been reading all the posts regarding the best ISA for this tax year and on the MSE main pages, they recommend Santander for the best rate (3.3% and tracker) but reading all the saving forums, Santander seem to have a really bad reputation and now I'm uncertain whether to trust them with my money!

Ideally I want to save around £300 a month and I've been looking around at the Manchester Building Society regular saving ISA which is at 4%.

I was just wondering what you guys thought about the 2 different ISA's or if you had any other tax free saving ideas? I've just bought a NS&I inflation beating bond and I have thought of saving up to buy more later on, but once these have gone, what do you think would be the best option?

Thank you very much for any help on this

M

Baldur

If you had the full allowance available as a lump sum, the Santander Flexible ISA would earn you more interest over a year than the MBS Regular Saver ISA (£176.22 versus £115.01) but if you are making monthly subscriptions anyway, the MBS one should be considered.

junglejim2

Think long and hard about using Santander.....they are service is very bad

TheMatrix_2

For this reason I chose to use the AA instead of Santander, even though they don't track the base rate.

frivolous_fay

I've plumped for the Manchester one. I like regular saver accounts. As long as the ISA allowance keeps going up, and my wage stays stagnant, it's going to get tougher to have that £5k+ (x2) lying around in April when it could be performing better than the lousy current ISA rates!

DragonQ

junglejim2 wrote: »

Think long and hard about using Santander.....they are service is very bad

True. 8 weeks after applying online I still had no account and they said they hadn't received the requested evidence I sent them.

In the end I opened an ISA in a branch, then and there. So much easier and you don't have to deal with their rubbish phone support. I would've just stuck with Halifax if it was like 0.1% difference but it's 3.3% vs 3.0% and I can access the branch easily so whatever.

The_Enforcer

I was mulling over the same connundrum over the weekend. I worked out on the basis of the maximum monthly deposit into the Manc Regular Saver of £445 would give an end balance of £5455.01, as opposed to £5434.98 if the same amount is paid into the Santander ISA every month.

Although the RS would give up to £20 extra interest, I decided in favour of the Santander ISA for the following reasons:

1. Inability to manage RS account online, I don't live near a branch, so would be at the mercy of snail mail. I already have a couple of A&L/Santander products so could open and manage online (at least, in theory).

2. RS is variable, without guarantee of tracking base rate, so could be altered downwards as well as upwards and may not respond to BoE rises. Santander rate is guaranteed not to fall if base rate drops below 0.5%.

3. RS obviously ties you in, so unable to switch to better deal without loss of interest (although 1 withdrawal permitted).

4. Best time to open any 12-month RS ISA is right at beginning of the tax year so that it only spans one tax year, opening now would mean subscribing to it in 11/12 AND 12/13 and would be unable to subscribe to another ISA in 12/13 until the matured funds had been transferred into another account.

Hope this helps with your deliberations.

trying_2_b_good

I have been with Abbey (now Santander) for over 15years and have never had a problem...don't talk to me about Natwest though!

If you go with Santander and don't already have an account with them, they often give £100 for opening a current account. Unsure if this offer is still on, but would be worth considering if you were going to open the ISA.

mmctear

trying_2_b_good wrote: »

If you go with Santander and don't already have an account with them, they often give £100 for opening a current account. Unsure if this offer is still on, but would be worth considering if you were going to open the ISA.

I think I'm going to open the Santander one even though The Manchester one is very tempting (I live in Manchester so access wouldn't be a problem). I've tried to open it online but I think I'm going to just go into a Branch and get it sorted then and there. I also like to access my banking online.

Does anybody know if you have to transfer all direct debits for the £100?? I've looked at this before but I don't really want all the hassle in transfering all my direct debits

The_Enforcer

New Santander* Preferred current account customers get a £100 sign-up bonus and 5% in-credit interest on the first £2,500 for the first year (1% after that), plus a 0% overdraft for the first year. Plus apply via Moneysupermarket (the link above takes you there) before 5 June and you'll also get a £25 Amazon voucher.
To get these perks use its 'Account Transfer Service' to move across direct debits and standing orders, and pay in your salary of at least £14,200 (there's a £2 fee if you miss the £1,000/mth payment). You should get the bonus within three months.