05/06 tax year - cash ISA - 5.50%+

ED

ISA (Mini Cash) - new offers, effective from 6 April '05 :

5.50% National Counties Bdg Soc for "Guaranteed Mini Cash ISA" - to be not less than 0.50% above Base Rate until the end of the impending new tax year.

5.70% Fixed Halifax for 4-year "Fixed Rate ISA Saver". (Good rate currently, but not if/when Base Rate rises, as this offer is FIXED.)

5.50% (including bonus) Portman Bdg Soc for "25 Day Notice ISA" (not less than £3,000). Same rate is currently offered in 2004/05 tax year for 45-day withdrawal notice ISA, but that includes 0.65% bonus for first 6 months.

Anyone here know of other new offers, for deposits next Wednesday onwards (6th April)?

ED

My family has decided against National Counties Bdg Soc for Cash Mini ISA in the new tax year. Although no info is yet on the society's website re 'Guaranteed ISA', we have received the application pack by post. So thought of sharing key features on MSE.

1) Transfer to another ISA provider would be subject to a loss equivalent to 10 days' interest. [I make that over £4.50 if the rate remains at 5.50%.]

2) Transfer from other ISA providers not permitted until after 5 April '06 [ie end date for guarantee rate will not be less than 0.50% above Base Rate].

Conclusion : competitive rate, suitable for newcomers with £1 - £3,000 for impending tax year only. Probably less useful for existing ISA holders, and of no use to those wishing to transfer-in previous year(s) ISAs.

Milarky

ED wrote:

Conclusion : competitive rate, suitable for newcomers with £1 - £3,000 for impending tax year only. Probably less useful for existing ISA holders, and of no use to those wishing to transfer-in previous year(s) ISAs.

You don't say if no transfers-in from earlier years are allowed ED, are they?

The abilty to get an enhanced rate on cumulative sums rather than a single year's sub obviously makes for a more profitable investment throughout. But the time to withdraw - even if it is ten days - should be assessed based on the length of the guarantee in comparison to this delay - eg '1 year [365] days @ 5.50% equates to; 365 days @ [355/365] x 5.50% about '5.35%' in other words.

It really is a shambles that ISA transfers have to be the subject of postal cheques due to regulation - as you mentioned - and therefore loss of interest. There is nothing to stop the banks agreeing to compensate customers for this imposed requirement - and isn't the banking code moving in this direction anyway?

Regards M

ED

Transfers-in from earlier years are allowed only from the year 2006, on 6 April onwards. That is the date the rate guarantee expires, alas.

Milarky - totally agree with your comment : "The abilty to get an enhanced rate on cumulative sums rather than a single year's sub obviously makes for a more profitable investment throughout."

First Direct declined to allow ISA transfers other than via cheque, claiming to our family this was due to "government regulation". Anyone here been allowed to transfer an ISA via BACS to a fresh provider?

ED

7.50% is offered for Portman Bdg Society's Regular Saver ISA that launches this coming Wednesday (6th April).

Possibly OK for disciplined people with modest savings, aiming to add to their ISA month-by-month (as the name suggests) - up to £250 per month maximum. However, if a monthly payment is missed the rate drops. Withdrawal would cause loss of the equivalent of 90 days’ interest. £30 fee to transfer the ISA to another provider after the term. Stringent, methinks!

Disciplined savers could earn 7.50% on £250 for 12 months, 7.50% on £500 for 11 months, 7.50% on £750 for 10 months, and so on...

People who already has £3,000 would do better using another ISA provider.

ED

6.00% Fixed rate for 1 year is offered by Bristol & West for its regular savings cash Isa, also launching this coming 6th April. Monthly deposits can be £20 - £250. On the anniversary, the rate becomes variable and is guaranteed to be no less than 1% below Base Rate. No fee to transfer out after the anniversary. Transfer to another provider during the first year would cause 90 days' loss of interest.

Portman Bdg Soc apprarently require precisely £250 to be deposited every month of the year.

isasmurf

National Counties Guaranteed Cash ISA brochure is available here (pdf document)

isasmurf

ED wrote:

First Direct declined to allow ISA transfers other than via cheque, claiming to our family this was due to "government regulation". Anyone here been allowed to transfer an ISA via BACS to a fresh provider?

I'd like to see where FD think it must be done by cheque because I cannot find anything in the guidance notes or regulations that says that. When I transferred from HSBC to Nationwide a few years ago, my Nationwide ISA was credited with my ISA balance the same day it left my HSBC ISA.

ED

isasmurf - your experience "a few years ago" sounds much fairer. Was this pre-9/11?

Here is what First Direct wrote to a member of my family: "The transfer process is actioned in accordance with the Inland Revenue regulations which means a cheque is sent to the new provider along with the necessary documents. Bacs payments cannot be sent."

Anyone here received a written assurance from First Direct that BACS can, in fact, be used to transfer-out to another ISA provider?

isasmurf

ED wrote:

isasmurf - your experience "a few years ago" sounds much fairer. Was this pre-9/11?

No, it was about 15/16 months ago.

lipidicman

ED wrote:

5.50% (including bonus) Portman Bdg Soc for "25 Day Notice ISA" (not less than £3,000). Same rate is currently offered in 2004/05 tax year for 45-day withdrawal notice ISA, but that includes 0.65% bonus for first 6 months.

Couldnt find anything about this on their website. Is the bonus the same on this new account?. My main problem with Portman is that they dont accept transfers in and they now have a charge for transfers out.