Cash ISAs: The Best Currently Available List

shaz77_2

I don't know much about this Julian Hodge bank, is it a safe bank that is protected by the compensation authority etc?

Kazza242

The_Enforcer wrote: »

On paper, the Birmingham and Manchester ISAs offer the best rate at 4% and would continue to do so assuming a 0.5% cut is applied across the board.

However, my question is this: as these were not cut during the period between the December and January rate cuts, how likely is it that they will be the subject of a greater rate cut (around 1.5%), which would take them below the Scottish Widows ISA (assuming that only falls by 0.5%)?

Are the Standard Life and Leek United ISAs similarly at risk of a greater rate cut?

Yes, it is likely that Birmingham Midshires and Manchester BS will apply a larger rate cut - to factor in the two UK interest rate cuts they have yet to respond to. I think that a number of ISA providers will cut their rates by the full 0.50% and more, as has often been the case when UK interest rates have fallen.

I think we should know how much each provider is cutting it's rates to by Feb 1st. As that is only 3 weeks away, it might be worth waiting until then before applying for your ISA. At least that way you'll know what rate you'll be earning.

Kazza242

shaz77 wrote: »

I don't know much about this Julian Hodge bank, is it a safe bank that is protected by the compensation authority etc?

Julian Hodge Bank are authorised and regulated by the FSA. They are a member of the Financial Services Compensation Scheme. See here.

MarkyMarkD

The Enforcer

Your questions are impossible to answer. It's as likely as not that institutions paying over the odds will reduce their rates, irrespective of whether they have, or haven't, cut their rates in respect of various BBR reductions. Honestly, it's a gamble whichever variable rate you choose.

Institutions paying significantly over the odds get swamped with customers trying to transfer into them (if they allow transfers in) meaning that they can't cope; service is rubbish; and they cut the rates to clear the backlog. It's a self-balancing thing. So opting for a middling rate is (IMHO) likely to prove better value in the medium term than opting for a current best buy.

If you look at the Moneyfacts Consistent ISA tables, you'll notice that NONE of the best buys listed is there at all (except Kent Reliance which was recently at the bottom of Kazza's list and has just dropped off as its rate is now 3.01%). http://www.moneyfacts.co.uk/money/consistent/3/consistent-mini-cash-isa-18.aspx It just shows how those offering best buys rarely stay there for long.

MarkyMarkD

Kazza242 wrote: »

I think we should know how much each provider is cutting it's rates to by Feb 1st. As that is only 3 weeks away, it might be worth waiting until then before applying for your ISA. At least that way you'll know what rate you'll be earning.

Providers have 3 working days to update the rates on their websites, under the Banking Code, and hence I would recommend waiting until 3 working days after the start of the month after a BBR change! That means around the 5th typically (depending when the weekends fall). Some providers - Principality for example - are leaving things even longer, cutting rates on the 8th in the last few months. But once Kazza's tables have dates for all the rate changes, it will be easier to compare.

Kazza - I think you should remove "NEW" against rates which are definitely a rate cut or two behind the pace - i.e. most of those without dates - as otherwise it looks like the rates are new.

The_Enforcer

MarkyMarkD wrote: »

Kazza - I think you should remove "NEW" against rates which are definitely a rate cut or two behind the pace - i.e. most of those without dates - as otherwise it looks like the rates are new.

Thanks for your advice, I have double checked via Moneyfacts and their details button reveals that Birmingham Midshires, Manchester BS and Leek United BS all had their current rates in place before the 4th December 2008 rate cut, hence they have yet to adjust their rates in the light of a combined 1.5% cut, rather than just this week's 0.5% cut, unlike those on the list that have already adjusted early in 2009.

The one anomaly is Standard Life, whose ISA came out on 10th December 2008, when they would have been aware of the 1% cut. My current thoughts are that it's more likely that this deal already takes account of that cut and so the next cut will be in line with the others, leaving it at the top of the list of up-to-date ISAs by the time we get to early Feb.

Aside from that, other benefits are that I would be able to manage it by telephone (better than post or non-local branch although not as convenient as internet) and there is the option of having interest paid monthly rather than annually.

It's still a gamble, but after the Icesave debacle (I'd only had the money in their ISA for barely 3 months before they capitulated) I'm due a slice of luck.

harz99

The_Enforcer wrote: »

9.

The one anomaly is Standard Life, whose ISA came out on 10th December 2008, when they would have been aware of the 1% cut. My current thoughts are that it's more likely that this deal already takes account of that cut and so the next cut will be in line with the others, leaving it at the top of the list of up-to-date ISAs by the time we get to early Feb.

Aside from that, other benefits are that I would be able to manage it by telephone (better than post or non-local branch although not as convenient as internet) and there is the option of having interest paid monthly rather than annually.

But be aware that they open all Cash Isa's as annual interest, than when set up you have to ask them to change to monthly - why I no not!

gowgowuk

MarkyMarkD wrote: »

If you look at the Moneyfacts Consistent ISA tables, you'll notice that NONE of the best buys listed is there at all (except Kent Reliance which was recently at the bottom of Kazza's list and has just dropped off as its rate is now 3.01%). http://www.moneyfacts.co.uk/money/consistent/3/consistent-mini-cash-isa-18.aspx It just shows how those offering best buys rarely stay there for long.

Thanks MarkyMarkD for this table. Very useful. I, like the Enforcer and many others, have my Icesave cash ISA to reinvest, but prefer to wait for a while (in a 6.3% Egg fixed savings in the meantime) until things are settling a bit. But I would go for the best buy in the Moneyfacts Consistent list rather than the top rate of the moment.

tiptoe_mouse

gowgowuk wrote: »

Thanks MarkyMarkD for this table. Very useful. I, like the Enforcer and many others, have my Icesave cash ISA to reinvest, but prefer to wait for a while (in a 6.3% Egg fixed savings in the meantime) until things are settling a bit. But I would go for the best buy in the Moneyfacts Consistent list rather than the top rate of the moment.

Ooo - that's where my icesave money is sitting too. I didn't realise when I opened the acount in June that it was fixed rate, and only a put a quid in it as I had all my savings in regular savers. Then I was checking all my rates sometime last year and was delighted to discover it was indeed fixed.

So when the Icesave money finally turned up it seemed a natural place to stash it. Even after tax I'm getting more interest than in an ISA. Only hitch is the interest is stuck outside the tax shelter forever.

tiptoe

Kazza242

MarkyMarkD wrote: »

Providers have 3 working days to update the rates on their websites, under the Banking Code, and hence I would recommend waiting until 3 working days after the start of the month after a BBR change! That means around the 5th typically (depending when the weekends fall). Some providers - Principality for example - are leaving things even longer, cutting rates on the 8th in the last few months. But once Kazza's tables have dates for all the rate changes, it will be easier to compare.

Kazza - I think you should remove "NEW" against rates which are definitely a rate cut or two behind the pace - i.e. most of those without dates - as otherwise it looks like the rates are new.

Do you mean where I have added ':starmod: NEW :starmod:' next to an ISA? If so, then I think you misunderstand what 'NEW' means in this context. It means that an ISA is new to the list (or returning to the list after a period of absence). It doesn't relate to the rate at all.

The ' :staradmin NEW RATE :staradmin' relates to a recent rate change, but I removed all of them immediately after the announcement from the BOE that base rate was being reduced to 1.50%.