Is a Santander ISA a bad idea?

kidc

Hi there!

I'm looking to open an ISA for with my 11-12 allowance and Santander appears to be one of the best flexible ISAs available at the moment as it will track base rate and offers 3.5%. However, I've read a fair few horror stories by people banking with them.

Do any moneysavers have experience of opening/holding and ISA with Santander recently? Good? Bad? Horrific?

Also what are other people thoughts on if interest rate will rise within the next 12 months or so?

My alternatives are:

- The AA ISA at 3.35% which won't track base rate, but might be a more reliable service if Santander are as bad as the reviews.

- Top up my existing ISA account held with Halifax (3.0%) which current holds my allowance and interest from the last two years.

Thanks in advance.

Stochasticity

I have the Santander Flexible Loyalty ISA (3.5%), opened in branch without any problems.

Their customer service isn't very good but there's only so much customer service you need with a savings account, especially if you're 'buying and holding' as ideally you should be with an ISA.

If you have no previous experience of Santander (?), are you sure you're entitled Santander Loyalty Flexible ISA (3.5% + base rate increases) rather than the Santander Flexible ISA (3.3% + base rate increases)?

If you are, then 3.5% + base rate increases is better than all the other options including the AA even if base rate doesn't budge at all.

If not, then the AA rate is better and only then do you need to factor in whether or not you think base rate will rise.

Base rate, in the long run, is going to rise. But it may not rise this year even. It's obviously difficult to forecast.

But you do only need the base rate to increase once by 0.25% for the Santander product to come out ahead of the AA, even if that rise doesn't occur until February next year.

If you have debts that are linked to base rate (a student loan, a mortgage, even some credit cards these days) then the tracker element of the Santander ISA also buys you a little insurance against those increases.

The Halifax 3% offering is only really competitive for ISA transfers rather than for 2011/12 contributions, but if the price you put on convenience is more than about £40, then you may well just stick with them.

saintalan

kidc wrote: »

...Do any moneysavers have experience of opening/holding and ISA with Santander recently? Good? Bad? Horrific?...

Hi

I don't have the energy to write the whole saga but suffice it to say that Santander and my external bank have been playing Ping Pong with my 11/12 allowance for a month.

I would probably still do it again but here is a tip. Whatever they say or write DON'T set up a DD on your ISA, you don't need to.

They also have a habit of writing meaningless/unintelligible letters which arrive about 2 weeks after dated!

Cheers

Alan

ses6jwg

the 3.5% loyalty isa was withdrawn a few weeks ago.

the 3.3% version is availiable.

there isn't much that can go wrong with an ISA, though I'd advise opening in branch or over the phone rather than online., Probably easier in branch if you are new to group as they can validate your ID there and then and give you a sort code and account number to walk away with that day.

dunstonh

The issues with Santander are more their investment products rather than their savings products. Especially where they need you to buy a dire investment product to get a better rate on a cash ISA. So, as long as you are not using them for investments and you understand that their branches are usually too busy with not enough staff and service isnt great then you will be fine.

VT82

It's the second year I've used Santander for my ISA, and they've been fine. The only problem I've had with it was my own fault.

I'd open it by telephone like I did rather than going into a branch, as I get them impression they would make you see someone with an appointment etc... I didn't need to provide any ID as they managed to verify it electronically.

I would still rather have my instant access savings elsewhere given all else being equal, and wouldn't use them as my current account provider.

The ISA they offer really is a good deal as well.

apt

The biggest risk will probably come when you have to transfer your ISA after a year to get a decent rate. Things might go well, but there is a higher chance that your money languishes for weeks and months earning very little interest while Santander wallows in incompetence than with a better-run organisation.

Stochasticity

apt wrote: »

The biggest risk will probably come when you have to transfer your ISA after a year to get a decent rate. Things might go well, but there is a higher chance that your money languishes for weeks and months earning very little interest while Santander wallows in incompetence than with a better-run organisation.

Can always be circumvented (if not benefitted from) by transferring to a bank that offers you interest from the date of application, e.g. Halifax, Nationwide.

ses6jwg

apt wrote: »

The biggest risk will probably come when you have to transfer your ISA after a year to get a decent rate. Things might go well, but there is a higher chance that your money languishes for weeks and months earning very little interest while Santander wallows in incompetence than with a better-run organisation.

This may have been the case 12-14 months ago, however if you visit the tax free savings board you will see very few problems relating to Santander ISA transfers in comparison to last year.

Working first hand in branch we have only had ONE problem with an ISA transfer out this year so far.

ChiefGrasscutter

I'm no great fan of Santander having had to make a complaint earlier
...however I can confirm that they managed to transfer my accumulated ISA to the Halifax earlier this year without any hassle, problems, errors etc at all.

Honkycat

ChiefGrasscutter wrote: »

I'm no great fan of Santander having had to make a complaint earlier
...however I can confirm that they managed to transfer my accumulated ISA to the Halifax earlier this year without any hassle, problems, errors etc at all.

Me too... no problems.