Abbey Special Edition Choices ISA

pin

Been looking for a new ISA after the IF ISA interest rate went down. Have had a look at the Abbey Special Edition Choices ISA which is offering an interest rate of 5.5% fixed for one year. It seems like a good deal, you can transfer other year's ISA's across.

However there seem to be a few downsides:
- Interest earnt on the ISA must be paid into another account (i.e. non ISA)
- You can only make one deposit

Has anyone else had any dealings / insights into this ISA?

Basically is it a good deal?

Thanks

http://www.abbey.com/future/taxeff/savings_isas/savings_isas_choises_isa.html

sly_dog_jonah

Depending on your view of the likely movements of interest rates over the next 12 months, it seems like a good deal for most people that don't need access to their ISA cash. 5.5% is a significant premium over A+L 5.4% and the normal Abbey postal rate of 5.35%, but it interest rates go up in the next 12 months a variable rate might rise above the fixed rate.

Plus points are no exit penalty like for A+L, big transfers allowed in unlike First Direct's 6.25% (for 8months) offer. Downside is Interest is not re-credited to the account, so would not remain within the tax-free wrapper of an ISA. Not so important for accounts with £3k in it but significant if you are looking to transfer all your cash ISAs from the last 5 years in.

Not sure if you can open it with a transfer if you've already used up your 2004/5 allowance, but there's no harm in asking! I'm contemplating a switch from M&S to Abbey but would probably opt for the Postal ISA because it keeps the interest within the tax-free wrapper.

deemy2004

Its a poor excuse for a 1 year fixed rate bond... The business about the cannot add interest to the ISA switches me off...

pin

Cheers for the imput. I'll be putting in two years worth of ISA (+ interest). Worth it or not such a good deal? I guess then the Abbey Postal ISA would probably be the best bet?

Kazza242

Doesn't Abbey's postal ISA guarantee to pay BOE base rate + 0.5% expire next month? Does anyone know if they've extended the guarantee or launched a new one?

If they haven't extended the guarantee or announced a new one, then what's to stop them dropping the interest rate once the guarantee expires?

davidcampbell

i dont believe the guarantee has been extended yet but ill double check at work tomorrow

davidcampbell

yeah as i thought there is no announcement yet as to whether the rate will be dropped or the guarantee extended.

i cant see it dropping to be honest though. the hassle we had at laucnh of the postal isa was a nightmare and i cant see them alienating all those customer a second time in 5 months.

if i was a gambling man (and i am!) my money would be on the rate guarantee being extended (at least for the short term)

(it should be noted here that im not a very good gambler )

Kazza242

davidcampbell - Thanks for the info . If they do extend the guarantee, then I may be tempted to open an Abbey 2005/06 ISA.

pin

I think I'll leave my money in IF and see what happens after April 1 to see if they extend their guarantee, thanks again.