BM Savings - 2 year Fixed Rate ISA - 4.05% AER

dazza-mac

Hi,

I'm one of those people who just go dyslexic when faced with financial jargon.

My query, as I'm not the sort that will hunt around for ages for the best deal as I usually end up confused: Does a 2 year fixed rate isa of 4.05% seem like a good move to any of you experts.

Or, despite knowing that none of us has a crystal ball to see into the future, but does anyone think that next year we may get more than 4.05% isa's for a one year deal.

I'm just not sure what to do, as I was going to open the BM 4.05% isa and transfer a lump sum from an old isa. Is it a good idea to tie up the cash for 2 years?

tushingham

dazza-mac wrote: »

Hi,

I'm one of those people who just go dyslexic when faced with financial jargon.

My query, as I'm not the sort that will hunt around for ages for the best deal as I usually end up confused: Does a 2 year fixed rate isa of 4.05% seem like a good move to any of you experts.

Or, despite knowing that none of us has a crystal ball to see into the future, but does anyone think that next year we may get more than 4.05% isa's for a one year deal.

I'm just not sure what to do, as I was going to open the BM 4.05% isa and transfer a lump sum from an old isa. Is it a good idea to tie up the cash for 2 years?

Hi Dazza,

Im no expert so take this post with a pinch of salt. This is how I see it.
1) Will you need access to the cash in the next 2 years? If no...
2) Are you looking to keep the money in cash rather than any other form of investment (stocks and shares etc)? If yes...
3) I have opened this BM ISA 2yr fix. My own view is that its a very good rate at present.
There are higher rates for a longer fix but i don't think they are significantly higher to make it worth fixing for much longer. The variable rates or 1 year fix rates aren't great imo.
Will rates rise significantly whilst your money is locked away for 2 years? In my own opinion I don't think so.
I think rates will go up over the next year or two but I'm not convinced it'll be by a lot. Don't forget that if the rates go up in a year then they may have to be a fair way above 4.05% in a years time for you/me to lose out significantly.
This account will be getting 4.05% this coming year whereas a variable or 1 yr fix will be getting 3.5% or so. That means this account is ahead already. For the second year this account will still be getting 4.05% so the variable or 1 yr fix then will need to be above 4.05% to catch up overall. It may do that but thats the risk you take....

Thats my tuppence worth but all depends on what you think will happen with interest rates and its a risk you take. I may be wrong and rates may rocket. I may be wrong and rates may plummet making me wish I'd locked in for 4 or 5 years!

DYOR and all the best
t

dazza-mac

tushingham wrote: »

Hi Dazza,

Im no expert so take this post with a pinch of salt. This is how I see it.
1) Will you need access to the cash in the next 2 years? If no...
2) Are you looking to keep the money in cash rather than any other form of investment (stocks and shares etc)? If yes...
3) I have opened this BM ISA 2yr fix. My own view is that its a very good rate at present.
There are higher rates for a longer fix but i don't think they are significantly higher to make it worth fixing for much longer. The variable rates or 1 year fix rates aren't great imo.
Will rates rise significantly whilst your money is locked away for 2 years? In my own opinion I don't think so.
I think rates will go up over the next year or two but I'm not convinced it'll be by a lot. Don't forget that if the rates go up in a year then they may have to be a fair way above 4.05% in a years time for you/me to lose out significantly.
This account will be getting 4.05% this coming year whereas a variable or 1 yr fix will be getting 3.5% or so. That means this account is ahead already. For the second year this account will still be getting 4.05% so the variable or 1 yr fix then will need to be above 4.05% to catch up overall. It may do that but thats the risk you take....

Thats my tuppence worth but all depends on what you think will happen with interest rates and its a risk you take. I may be wrong and rates may rocket. I may be wrong and rates may plummet making me wish I'd locked in for 4 or 5 years!

DYOR and all the best
t

HI,

Thanks very much for replying. I thought I sounded really dim and wasn't expecting a reply.

I don't need access to the money and I'm prepared to leave it for two years. I was just worried whether it was better to fix on a one year isa and try again next year.

I've applied for the 2 year fixed and should hopefully have the paperwork within the next week

tushingham

dazza-mac wrote: »

HI,

Thanks very much for replying. I thought I sounded really dim and wasn't expecting a reply.

I don't need access to the money and I'm prepared to leave it for two years. I was just worried whether it was better to fix on a one year isa and try again next year.

I've applied for the 2 year fixed and should hopefully have the paperwork within the next week

Hi,

No probs. Not a dim question at all. Particularly as there is no right answer. If you asked lots of people you may get differing views and in the end you have to go with what you're comfortable with.

FWIW I think you've done the right think but I would say that wouldnt I, given that if done the same!

t

Newly_retired

I applied by phone today for 2012-3, to transfer from BM savings. They still have to send me a form to return by post.
My experience of BM is very good, especially for savings you are not going to touch for a while.
I'm still undecided about transfering from previous years as I may need access to some savings during the next years.
They could not tell me how long it will remain open.
Personally I agree with tushingham, that it is a decent rate and two years is as long as I will fix at the moment.

10_66

MOPI wrote: »

...Just wanted to update you - I have been on the phone to BM Savings and they have stated the account CAN be funded by electronic transfer i.e. faster payment etc. The details to use for faster payment are as follows:

Sort code: 20-97-78
Account Number: 00968773
Payment Reference: ISA account number (mine is 10 digits long)...

Just to clarify the situation (I rang to see if they could confirm that my account's been opened, which it has). The opening deposit must be by cheque, however, any additional payments in to the account can be done by electronic transfer (but remember you can't add to the account once it's been withdrawn).


...........

Zekko

Just wanted to say top-notch service from Birmingham Midshires on this ISA account.

They managed to complete the transfer of my previous years ISA held at Nationwide in 7 working days from date of application. :beer:

Newly_retired

Please could anybody help me with the maths for withdrawals from this account.
So far I am funding it with this year's new ISA allowance. So far, so good. Application form arrived 2 days after my phone call.
I don't plan to need this money for 2 years.

Supposing I decide to transfer my previous years' ISAs in, and then find I want to withdraw some before the 2 yrs is up....
In the first year I would lose 180 days of interest on the amount withdrawn, in the second year I would lose 90 days.
If I had £20 000 I wanted to withdraw, how much would I lose?
Maths was never my strong point. Can anybody help?

10_66

Newly_retired wrote: »

....In the first year I would lose 180 days of interest on the amount withdrawn, in the second year I would lose 90 days.
If I had £20 000 I wanted to withdraw, how much would I lose?...

I make it £399.45 lost if 180 days or £199.73 if 90 days.

mbbetter

Sorry this has probably been answered before, but I couldn't see on this thread. As I go through the application (online) it has a rate of 3.98% rather than the advertised 4.05%

Is this to be expected?

Thanks