Direct Reward and ISA Saver Online (halifax)

bobblebob

Ive had the Direct Reward ISA with Halifax for about 4 years now, and keep changing to the new Direct Reward when the reward period ends. Usually its just called Direct Reward 1, 2, 3 etc on their website

This year tho they dont appear to have a Direct Reward, and instead have ISA Saver Online. Is this basically there new Direct Reward ISA?

Also it states "2.60% tax free/AER variable including 12 month fixed bonus of 2.35%"

Does that mean the interest payable next April will be 2.60% but no lower than 2.35%? Not sure what the bonus thing is

Mandelbrot

bobblebob wrote: »

This year tho they dont appear to have a Direct Reward, and instead have ISA Saver Online. Is this basically there new Direct Reward ISA?

Yes. It's their 'best' easy-access online Cash ISA.

Also it states "2.60% tax free/AER variable including 12 month fixed bonus of 2.35%"

Does that mean the interest payable next April will be 2.60% but no lower than 2.35%? Not sure what the bonus thing is

It means that you get a rate of 2.60% for 12 months from the time you open the account, and then the rate drops by 2.35% to just 0.25%.

2.6% for an online cash ISA is, of course, way down on the sort of figure obtainable elsewhere.

Edit: Strictly speaking, it means you will very probably get a rate of 2.60% for 12 months. Since it is a variable rate, it could conceivably be varied up or down by Halifax during that period. But Bank of England base rate is likely to be at 0.5% for some time, so that's not likely, unless the take up of this ISA offer is so poor that Halifax see a need to increase the rate to get customers.

bobblebob

Thanks for the info, will see what others offer

LongTermLurker

^^ that's basically what it means. You get a variable rate, which is currently 2.6%, but if this was your second year, you would get 2.35% less.

In other words, the account's basic rate must be 0.25% (less than base rate!!);if that rate didn't vary for 2 years, you would get 2.6% in the first year and 0.25% in the second, because the 2.35% bonus was added for the first year.

bobblebob

So similar to the old direct reward ISA then, interest drops after 12 month.

emeraldbugle

I had a letter saying the ISA would change to the ISA saver variable. When I looked this morning it had dropped to 0.5%, I phoned them and the only rate they can transfer to is the 2.40% ISA Saver Variable.

If you want the 2.60% you have to apply online and then fill in a transfer form. HTH

Mr_K

emeraldbugle wrote: »

I had a letter saying the ISA would change to the ISA saver variable. When I looked this morning it had dropped to 0.5%, I phoned them and the only rate they can transfer to is the 2.40% ISA Saver Variable.

If you want the 2.60% you have to apply online and then fill in a transfer form. HTH

I had a similar conversation with them this morning. Seems daft they can't put you direct into the 2.6% account. Going to transfer to the 3.1% Nationwide anyway, getting a bit hacked off with the Halifax.

Think i'll just transfer to the 2.4% account in the meantime. Does transferring to the 2.4% account mean mean you keep the same account no ? Still waiting for my 0.2% bonus which i'm told isn't paid till April so assume I'll need the same account no. to get it.

jennifernil

If you are at the end of your 12 months, has your ordinary interest been added? And did you check it was correct? You should get a letter saying how much the extra 0.2% has given you, but mine was all added as just one amount. I did check and it was correct.

They calculate it separately, so will no doubt take them a few days to sort that.

If interest has not yet been added, it will be when you transfer out, no need to wait till April to do that, you will get the extra 0.2% as long as you had £1 in there for a full year.

When you go to the 2.4% you keep the same account number. As per my other thread, I did this the day after my 3% was up, all went smoothly, showed on my internet banking within a couple of hours.

Mandelbrot

jennifernil wrote: »

If you are at the end of your 12 months, has your ordinary interest been added? And did you check it was correct? You should get a letter saying how much the extra 0.2% has given you, but mine was all added as just one amount. I did check and it was correct.

Ah yes, the letter. (I had almost forgotten about that. )
This illustrates the difference between 'adding' and 'paying' money into your account that I mentioned in another thread on this board.
Once the appropriate 12 months is up, they do the calculations (as jennifernil says) and the calculated amount (as per the letter) is added to your account. It seems the phone call-desk staff can see it on their screens, but you (the customer) can't see it online - until it is actually paid into your account, on 5th April or account closure/transfer.

Chickabee

Halifax are supposed to be increasing their rates on Monday 5th

2.4% variable up to 2.75%
2.6% online up to 3%

Mandelbrot

Chickabee wrote: »

Halifax are supposed to be increasing their rates on Monday 5th

2.4% variable up to 2.75%
2.6% online up to 3%

Yes. Now showing on their website.
The ISA Saver Variable : 2.75% drops to 0.5% after a year.
The ISA Saver Online : 3.0% drops to 0.25% after a year.

Incidentally, why would anyone lock their money away in Halifax's 1-year Fixed ISA at 2.25%, considering the better rates for their easy-access ISAs shown above?

Yes, I know it would make more sense to put it elsewhere, but the 1-year Fixed does seem particularly redundant.
After all, if you did put it in this account, and then didn't do anything at the end of the term, Halifax would automatically transfer your money into an ISA Saver Variable account.
Wouldn't you then get (if nothing changes in the meantime) the rate of 2.75% shown above i.e. a better rate than you were getting before? :think:
Or would Halifax simply ignore the bonus period and pay you just 0.5%? :think:
I guess I know the answer, really ...