Isa Interest (A&L)

lisyloo

However, that's also when the accounts are at their most competitive. I wouldn't transfer too early.

If there is a base rate rise in February (likely IMO) then the competitiveness of accounts will change.

Obviously no-one knows what will happen but as this is a closed account then usually that means it won't stay particularly competitive (banks draw new customers in with new issues and slowly make closed issues less competitive).

My money would be on 0.25% base rate increases in February and May.
These months are traditionally more likely as that's when the BOE do their quarterly inflation report so they have more data to work on.

It's a risk whatever you do because you could change to the most competitive account and then the situation changes a few months later.
All you can do is keep your eye on the ball.

masonic

lisyloo wrote:

If there is a base rate rise in February (likely IMO) then the competitiveness of accounts will change.

True enough, but the point I was trying to make is that the best accounts tend to be launched in the weeks approaching the end of the tax year, as banks scramble for the huge floating custom at that time. Transfer now, and you might wish you'd waited (if the rate is what's important to you, of course).

YorkshireBoy

masonic wrote:

True enough, but the point I was trying to make is that the best accounts tend to be launched in the weeks approaching the end of the tax year, as banks scramble for the huge floating custom at that time.

I seem to remember though, that the anticipated 'frenzy' never materialised last year.

IIRC, the A&L Direct ISA 2 rate (including the bonus) had been in place since the very start of 2006, and didn't Halifax actually cut their ISA Saver Direct variable rate to 4.75% (from 5%) and introduce a whole host of fixed rates (the 1 year option paying the old 5% rate)?

In short, I don't remember much competition at all.

I could be wrong though?

masonic

YorkshireBoy wrote:

I seem to remember though, that the anticipated 'frenzy' never materialised last year.

Yes, I guess on reflection you're right. I guess I just like to live in hope.

hot_chick_2

The interest on the Alliance and Leicester account was paid on the 1st January.

However if and when you move to another account with higher interest the Alliance and Leicester will add the interest made up to that date.

The bonus on the Aand L account finishes in April so this would seem a good time to look for the highest paying account.

lisyloo

True enough, but the point I was trying to make is that the best accounts tend to be launched in the weeks approaching the end of the tax year, as banks scramble for the huge floating custom at that time.

I agree it's a factor to take into account.
You may be right, maybe not.
I may be right about a rish in Feb, maybe not.
It's all guesswork.

Transfer now, and you might wish you'd waited (if the rate is what's important to you, of course).

If you really felt you'd made the wrong decision and then there is nothing to stop you transferring again.
Personally I don't want to be spending my life switching my ISA all the time, but it's not an irreversible decision if you think you have got it terribly wrong or circumstances change.
You simply move again (if the difference warrants it).

Personally I don't stick with the very highest because that would warrant changing every few months.
However by changing every 12-24 months you can get quite close to the top rates.
It isn't really worth worry about it to the nth degree.
For example £10K at 0.25% is £25 (minus any interest lost in the transfer), so you have to have quite big lump sums and plenty of time on your hands to worry about this excessively.

masonic

lisyloo wrote:

It's all guesswork.

Exactly, that's why, given the choice, I'd rather wait and make an informed decision nearer the time when all the options have presented themselves.

lisyloo

Exactly, that's why, given the choice, I'd rather wait and make an informed decision nearer the time when all the options have presented themselves.

The options will NEVER all present themselves. It's a moving target.

My own opinion is that rates will rise in Feb and May (could be wrong on that it's only a forecast).

So by about March one set of options will present themselves.
Come May there will be another set of options (new tax year and possibly new issues).
Come June there will be another set of options.

It's a moving target.

I am not disagreeing with you waiting (I personally am waiting too).
But waiting is a risk (i.e. you can wait too long) in the same way that switching is a risk (i.e. you can switch too soon).

masonic

lisyloo wrote:

The options will NEVER all present themselves. It's a moving target.

Well, not really in this case. That bonus on the A&L Direct ISA runs out at the end of April. That is the target I will be aiming for. I am only interested (for the moment) in using the transfer I will be forced into making before that time to my best advantage.

lisyloo

I am only interested (for the moment) in using the transfer I will be forced into making before that time to my best advantage.

Me too but I still don't think it's clear when the best time to transfer is.

So for example if you had £15K then you would currently be better off with Ruffler bank.

In February if rates go up then A&L may not put them up (as it's a closed issue) so somewhere else may be top.

You are right that there is an incentive to move end of April but there may be a case for moving before that.