Fixed Rate ISA Conundrum

spikyone

smokey_dave wrote: »

You can keep everything in your tax free isa and get the interest paid to you monthly instead of at the end of twelve months.

That makes no difference. The OP will get the same amount of interest regardless of whether it's paid monthly or annually, if it stays in the ISA. If you're having your ISA interest paid into an account outside of your ISA, you'll be losing out anyway, since inside the ISA it accrues interest which compounds!

TheMatrix_2

If you have interest paid monthly rather than once a year, and your interest is paid into your ISA monthly, you would effectively be earning interest on interest. That's why the annual equivelent rate is lower when you're paid monthly as opposed to once a year.

spikyone

TheMatrix wrote: »

If you have interest paid monthly rather than once a year, and your interest is paid into your ISA monthly, you would effectively be earning interest on interest. That's why the annual equivelent rate is lower when you're paid monthly as opposed to once a year.

Yes, but the total interest earned should be the same. See Martin's guide. Which is why I have no idea why smokey dave thinks it's worthwhile, never mind whether it's relevant to moving from one fixed rate ISA to another. :huh:

RobStaffs

In April I fixed my ISA for 2 years at 3.4% with Britannia and fixed my wifes at 3.2% for 1 year.Can get out of the 2 year one at 18 mths which in effect means I have 3.3% over both.I am sure I would have got more by switching but the hassle and timing issues of switching diminished the value of the additional interest.

RobStaffs

My ISA is fixed for 2 years at 3.4%.Wifes fixed for 1 year at 3.0%.The former can be broken at 18 mnths which gives us 3.2% for the combined value 18mnths. Would never fix beyond 2 years.

spikyone

RobStaffs wrote: »

Wifes fixed for 1 year at 3.0%.

Now that does seem an odd thing to do. The only reason I can see for taking a 1yr fix is to allow a transfer-in (which is the only time it beats an instant access account). But there are better fixes than 3.0% (up to 3.3%), and better instant access accounts that allow transfers too (up to 3.2%) :huh:

EDIT: Just noticed the post above it and I'm even more confused!

RobStaffs

spikyone wrote: »

Now that does seem an odd thing to do. The only reason I can see for taking a 1yr fix is to allow a transfer-in (which is the only time it beats an instant access account). But there are better fixes than 3.0% (up to 3.3%), and better instant access accounts that allow transfers too (up to 3.2%) :huh:

EDIT: Just noticed the post above it and I'm even more confused!

Meant to say my wifes is fixed at 3.2%.I just dont see the point in transferring existing ISA's unless the differential makes it really worth it .Too much hassle.We have been with our existing ISA provider for many years.

bigfreddiel

RobStaffs wrote: »

Meant to say my wifes is fixed at 3.2%.I just dont see the point in transferring existing ISA's unless the differential makes it really worth it .Too much hassle.We have been with our existing ISA provider for many years.

this is a typical response to many things -what am i going on about -its the line saying 'too much hassle'

ahh don't bother then -and now i say don't complain next year saying the return on your savings is crap - 'cause then i'l say - well you couldn't be bothered so live with it!

cheers

fj

ses6jwg

bigfreddiel wrote: »

this is a typical response to many things -what am i going on about -its the line saying 'too much hassle'

ahh don't bother then -and now i say don't complain next year saying the return on your savings is crap - 'cause then i'l say - well you couldn't be bothered so live with it!

cheers

fj

stop being an !!!!!!

RobStaffs

bigfreddiel wrote: »

this is a typical response to many things -what am i going on about -its the line saying 'too much hassle'

ahh don't bother then -and now i say don't complain next year saying the return on your savings is crap - 'cause then i'l say - well you couldn't be bothered so live with it!

cheers

fj

:rotfl::rotfl::rotfl: