Cash ISAs: The Best Currently Available List

daveoc22

hgt wrote: »

A better option than the 2% 2-year fix at Lloyds could be the 2-year tracker ISA from KRBS....
http://www.krbs.com/products/savings-and-isas/isas/tracker-isa/two-year-tracker-isa-issue-5/

The KRBS ISA tracks at base rate plus 1.51% (so is currently 2.01%), so if base rates go up, so will the rate. Of course in the unlikely event that the base rate goes down, so will the rate on the account! A nice feature, is that the KRBS tracker allows additional deposits and transfers-in at any time. There is a 180 day interest penalty on withdrawals however.

This seems good. A decent interest rate with the knowledge that if rates do rise then so will this.


Are any other building societies doing similar accounts---I've done a quick google search and haven't found any.


All I can see are the benefits so would appreciate someone pointing out the bad bits before I commit.

Consumerist

daveoc22 wrote: »

TAll I can see are the benefits so would appreciate someone pointing out the bad bits before I commit.

For what it's worth, it looks good to me but seems to need a postal application to make withdrawals - if that isn't an issue for you then it's about the best offer of its type that I've seen around.

nick65g

So, even an eventual 0.5% increase in BOE interest rate, EVERY YEAR FOR 5 YEARS, starting from 1.75% will earn max 2.90% (or 14.51% over 5 years). This is less than compounded interest of 3.19% yearly (or 15.93% over 5 years) if you can lock the money for 5 years at 3% fix rate.
formula used is = 100 * (1+ rate) ^ 5

Excel calc here:
Year1 Year2 Year3 Year4 Year5
1.75% 2.25% 2.75% 3.25% 3.75%
101.75 104.04 106.90 110.37 114.51
1.75 2.02 2.30 2.59 2.90 <--average % yearly

fix 5y
3.00% 3.00% 3.00% 3.00% 3.00%
103.00 106.09 109.27 112.55 115.93
3.00 3.05 3.09 3.14 3.19 <--average % yearly

codetown

nick65g wrote: »

So, even an eventual 0.5% increase in BOE interest rate, EVERY YEAR FOR 5 YEARS, starting from 1.75% will earn max 2.90% (or 14.51% over 5 years). This is less than compounded interest of 3.19% yearly (or 15.93% over 5 years) if you can lock the money for 5 years at 3% fix rate.

The assumption of a 0.5% rate rise a year is a bit debatable.
It is likely that a delayed rate rise will not be so smooth as you imagine if the econonomy starts picking up pace. You might well have:
2014: no increase
2015 +1%
2016: +2%
2017: +1%
2018: +0.75%
(which is also conservative,but not as smooth as your prediction)
In this case the 3% 5 year fix is certainly not very good.

hgt

daveoc22 wrote: »

This seems good. A decent interest rate with the knowledge that if rates do rise then so will this.


Are any other building societies doing similar accounts---I've done a quick google search and haven't found any.


All I can see are the benefits so would appreciate someone pointing out the bad bits before I commit.

Well I couldn't see any bad points with the KRBS Tracker ISA myself (other than the unlikely event that base rate might go down)! I've opened one of these.... what I like is that I can open the account with a fairly small amount, and it remains open for deposits / transfers for the full 2 years... so it's a good back-up account to have. I've also been searching, but tracker ISA's seem to be very rare these days.

cydney65

Does anyone know if the krbs isa could be opened before this isa year has finished and funded with £1000 even though I have put the full amount in this tax year? I hope this makes sense I just don't want to have to wait to apply and risk this tracker being closed.

KTF

The KRBS one cant be opened with a transfer in which means I am stuck until the new tax year

Hopefully they wont pull it in time.

diy1950

Quote from krps. "If you wish to transfer existing ISA funds in from another ISA provider, you will need to complete and return a paper transfer in form once you have made your initial deposit and your new ISA is open. If you only wish to transfer existing ISA funds (and do not have new funds to subscribe), please download, complete and return a paper application form and transfer in form - do not use this online application process."

As I understand it you can open the tracker isa just with transferred funds but the application can't be made online

Consumerist

cydney65 wrote: »

Does anyone know if the krbs isa could be opened before this isa year has finished and funded with £1000 even though I have put the full amount in this tax year? I hope this makes sense I just don't want to have to wait to apply and risk this tracker being closed.

If you have already used this year's ISA allowance then you can't subscribe any more cash in this tax year. You can, however, transfer any ISA to the KBS ISA and add more after 5 April.

purplestar133

KTF wrote: »

The KRBS one cant be opened with a transfer in which means I am stuck until the new tax year

Hopefully they wont pull it in time.

Consumerist wrote: »

If you have already used this year's ISA allowance then you can't subscribe any more cash in this tax year. You can, however, transfer any ISA to the KBS ISA and add more after 5 April.

Haven't looked into the details yet but KTF says you can't open it with a transfer so Cydney would have to wait until new tax year as already used this year's allowance. Unless I'm missing something? Entirely possible!