7% First Direct ISA?!?!?!?

richardruff

I feel as though I am missing something here.

I've been thinking about shifting my current account to First Direct's 1st Account. It appears they have the best rated customer service, and the features and costs ain't bad either.

So I've gone onto their website and clicked Banking -> Learn More (Under 1st Account).

I've then scrolled down to the "Our Charges" section and clicked "interest rates and charges section". Then I've finally clicked "Other wise you can download our Interest Rates and charges information PDF download (opens in new window)"

(Now might be the time to explain I'm new to the forum, so can't post links yet!)

Anyway, on page 3 of this PDF document there is a "Regular Saver ISA" boasting a tax-free rate of 7.00% AER.

I appreciate you need to be a 1st account customer (hopefully I soon will be) and that you have to pay in £25-£300 / month and probably can't make any additional deposits, but that fits the bill perfectly for me, and this seems like a bit of a whopper of a deal.

Am I missing something here?!

Plus if anyone else has any reviews to share about first direct I'd be very interested!

Derivative

Regular savers often have high rates because you are generally limited to low amounts and the balance slowly builds.

Careful_ly

I am sorry to say you are missing something, the First Direct regular saver Isa is no longer on sale.

The best regular saver isa available is The Nottingham building society paying 5%, but needs to be opened in branch, so only suitable if you live near to a branch.

MoneySaverLog

Those interest rates are correct as of the 01/06/2012 so I suspect it's a brand new ISA.

The flaws I see are that

A) it's a regular saver ISA in that you cannot subscribe the full £5640 allowance from this year in one go. So rates would not be as good as putting the whole lot in so equates to about 1/2 the rate about 3.5%.

I doubt they will allow transfers in of previous years ISA at 7%

C) The maximum you can put into this ISA is £3,600 (over 12 payments of £300) so you cannot make full use of your cash ISA allowance.

Link: http://www2.firstdirect.com/content_static/pdf/rates_charges.pdf

CLAPTON

7% : regular savings of 12 lots of £250pm (i.e. 3,000 in the year) will yield interest of £113.75 over the year.

presumably the interest rate drops to very little then.

MoneySaverLog

CLAPTON wrote: »

7% : regular savings of 12 lots of £250pm (i.e. 3,000 in the year) will yield interest of £136.5 over the year.

presumably the interest rate drops to very little then.

I'd guess so, as this is the case with all ISAs, but you can put in up to £300 a month rather than £250 according to the rates document.

CLAPTON

MoneySaverLog wrote: »

I'd guess so, as this is the case with all ISAs, but you can put in up to £300 a month rather than £250 according to the rates document.

the ISA makes it tax free

the interest calculation is because it is a regular saver

if one can save 300 rather than 250 then the interest will be proportionately more i.e. 136.5




certainly worth having if one has a FD account but not worth moving ones current a/c for that reason alone

SnowMan

Looks like out of date information in the pdf about the 7% regular saver ISA that was available until 31st July 2009.

Presumably somebody forgot to take it off that leaflet when the last such account reached it's 12 months maturity.

Without seeing a previous version of the charges leaflet couldn't say for sure though, but that looks the obvious explanation, rather than it becoming available again as a new account.

MoneySaverLog

I used the calculator on http://www.moneysavingexpert.com/savings/best-regular-savings-accounts to work out interest tax free on 7% regular saver at £300 a month and it worked out to £135.09

The interest on £5,640 put in as a lump sum at 3.5% is £197.40.

innovate

Use the Regular Saver Calculator to figure out the amount of interest you can get - - max £135.09 over a year if you pay in £300 a month.

It's a decent earner if you are 100% certain you won't save more than £300/mth into your ISA over the next 12 months but not of any use at all if you want to save your full £5,640 in this financial year.

If you do save in instalments rather than in a lump sum, and can put away more than £300/month, I suppose you could combine this ISA with the normal FD regular saver. On maturity, transfer your FD ISA into a new ISA, and top it up from the normal Regular Saver. This would most likely be the best deal for people who can save up to £600/month.

Assuming, of course, that the FD 7% ISA actually does exist......

Ultrasonic

SnowMan wrote: »

Looks like out of date information in the pdf about the 7% regular saver ISA that was available until 31st July 2009.

Think I'd be pretty sure this is info. for an account no longer available too. Twelve monthly payments of £300 would equate to the £3600 cash ISA limit for the 2009-10 financial year. I can't really see any bank offering a regular ISA that wouldn't let you invest your full £5640 entitlement by the end of the year.