NatWest Fixed Rate ISA.s- Nice try!

MoneySaverLog

opinions4u wrote: »

The best deals usually appear in March.

I'd wait.

badger09 wrote: »

Anyone with a good crystal ball who thinks there might be better deals on the horizon?

I hope so, I'm waiting for a provider to offer a 5% fixed rate account to transfer into. Trouble is Halifax have gone and reduced theirs :eek:

brewerdave

I went into my local NatWest branch on Friday to ask about the fixed ISAs as I have last year's allowance in a variable account with AA with a bonus which ends in May.
They wouldn't discuss the options available with me - said that I had to see an advisor for a financial review !! I've already told them on many occasions that I don't require their "advice".
So I've decided to wait for late March to see whats around - your loss NatWest!!!

Balls_2

Please let me condition my following comments by noting: that I have no problem with Natwest, and am happy with it, having been a customer for many many years now; that I believe if you are on top of your game, you understand that YOU ARE THE BANK, and it is up to you to instruct these institutions (whichever one you use) to do your bidding as to any transaction you wish to effect; and that there should be little difference between any of the main banks, from this standpoint. I comment now on the 2year fixed rate ISA. This caught my attention in the press. I am disinclined to scour yet another set of T&Cs to find the "tricks". There is probably more to it than as follows in terms of perfecting the analysis, but let us do a simple calculation: If the interest in the first month (say 04 March to 04 April) of the fixed term were NIL (it may be a bit more than this, I am not checking), then the headline interest rate would be had for 23 of 24 months, therefore:

100 x 0.039 x 11 /12 = 3.575% = effective rate in Year 1
The average rate over the 2 Years is:
(3.575 + 3.90) / 2 = 3.7375.
I could calculate the AER (which would be less), but really, why bother, if better rates are available elsewhere. (By the way, don’t you find this is the particularly annoying thing about these kinds of "offers": having to use retro-analysis to work out what it means.)
One may say the product offered is just another example of a "headline rate".
I would also note that if (and I say if, because I have not read the T&Cs) the term comes to an end on 03 April, 2 Years hence, what window of opportunity will then be available to transfer to a suitable investment at that time? On the other hand if, as seems perhaps more likely, the 2 Year fixed term comes to an end on 04 March not 04 April, then the AER is even less, at some 3.575%, because in each of the two years the 3.90% rate only applies for 11 of the 12 months.

Balls_2

Yes, if my analysis is correct, the resulting rate is less than 3.60%pa.
Go compare.

martinm1

You can arrange to transfer in on 28th march (best allow a day before), so you will get 0.5% for 7 days next 730 days you will get 3.9%.

Nett effect is reduction of 0.04% over the whole term so 3.86% rate is still best on the market.


Why is it not on the mse website???

jaxxx

I've been wondering the same - why isn't the Natwest transfer in ISA preferential rate mentioned on the mse website in the ISA section? In fact there's very little about it on any of the money websites. I'm debating about whether to moved into the 2 yr ones but been waiting to see what others think or in case new ISA rates come out in March.
So do you have an opinion MSE?

rb10

jaxxx wrote: »

I've been wondering the same - why isn't the Natwest transfer in ISA preferential rate mentioned on the mse website in the ISA section? In fact there's very little about it on any of the money websites. I'm debating about whether to moved into the 2 yr ones but been waiting to see what others think or in case new ISA rates come out in March.
So do you have an opinion MSE?

Presumably since the advertised AER is, for the reasons given above, impossible to achieve over the term of theaccount.


It is a very sneaky wayof making people think they are getting something better.

SnowMan

It is worth reporting it to the FSA as a misleading promotion, reporting form accessed from here

If enough people do this hopefully this Nat West scam will eventually be stopped.

ejv

badger09 wrote: »

I decided to take the plunge :eek: Time will tell if I've made the right decision, but 2% for around 5 weeks followed by 4.2% for 3 years is the best currently available

Me too...:beer:
My bonus rate of previous ISA was expiring on Feb 29th anyway.So I transferred it to Natwest for 3 yr fix at 4.2% with full knowledge that I'll fetch a lesser interest for a month either with the old provider or with the Natwest.

However, looking at their website today, I think the deal is still on;)
http://www.natwest.com/personal/savings/g2/isas/fixed-rate.ashx?extcam=ppc_NatWest-Savings_Brand-Fixed-Rate-ISA-Exact_Brand|natwest+fixed+rate+isa

brewerdave

Natwest have "renewed" the offer ...but still with the same catch -apply before the end of this tax year ....... the higher interest rates now don't kick in til 9th May !!