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

ED

lipidicman - see Post #6 for the latest ISA account offered by Portman Bdg Soc. It seems suitable only for disciplined people able to raise £250 per month, as opposed to holders of a lump sum or past years' ISAs.

Newspaper adverts for this 'Regular Saver ISA' offering 7.50% (fixed rate) state :

- This ISA is only available through branches of Portman or The Staffordshire

- Make 12 monthly investments of £250

- Withdrawals with 90 days' loss of interest

- This product may not be suitable for anyone wanting to invest a £3,000 lump sum

- There's a charge of £30 for transferring your ISA to another provider

Small print includes "If the balance falls below £250, the interest rate will be fixed at 0.10% ... On the anniversary of opening the account, the interest rate will revert to our Easy Access ISA standard variable rate...currently 4.75% on balances of £3,000"

steady__eddie

I reckon that £4-50 for a transfer out is pretty good (even though it's £4-50 too much). Usually the going rate is 25 or 30 quid.

ED

steady__eddie - indeed some banks and bdg societies seem greedy with fees. I wonder what percentage of Mini Cash ISA customers stay with the same provider, year after year, partly because of fees...or fear or errors and delays in transferring.

ED

3 categories of ISA (Mini Cash) saver :-

1) person able to deposit up to £250 each month for a year
2) person with £3,000 lump sum now
3) person with £3,000 lump sum + eager to transfer ISA(s) from past year(s)

Potentially suitable ISA accounts for each category (additional ideas welcome...)


1) person able to deposit up to £250 each month for a year :

Bristol & West Regular Savings Cash ISA @ 6.00% Fixed rate for 1 year - key features :
- monthly deposits can be £20 - £250
- on anniversary, rate becomes variable, guaranteed to be no less than 1% below Base Rate
- no fee to transfer out after anniversary
- transfer to another provider during 1st year would incur 90 days' loss of interest

Portman Bdg Soc Regular Saver ISA @ 7.50% Fixed rate - key features :
- only available at branches of Portman or The Staffordshire
- must make 12 monthly deposits of precisely £250
- if balance falls below £250, interest rate will be fixed at 0.10%
- withdrawals incur 90 days' loss of interest
- £30 fee for transferring to another ISA provider

+ see Categories 2 + 3 (below) for piecemeal deposits of variable amounts


2) person with £3,000 lump sum now :

First Direct Mini Cash e-ISA @ 6.08% until 06/10/05, 4.27% thereafter (promoted as "6.25% AER") - key features :
- penalty-free withdrawals
- start saving from £1 - £3,000 in the tax year
- interest paid monthly, instead of annually
- ISA transfers from another provider not permitted

National Counties Bdg Soc Guaranteed Mini Cash ISA @ 5.50% (variable) - key features :
- rate guaranteed to be not less than 0.50% above Base Rate till 06/04/06
- ISA transfers from another provider not permitted until 06/04/06
- transfer to another provider subject to 10 days' loss of interest

Halifax Fixed Rate Halifax ISA Saver @ 5.70% Fixed for 4-year term, so likely to seem uncompetitive after a Base Rate rise

+ see Category 3 (below)


3) person with £3,000 lump sum + eager to transfer ISA(s) from past year(s) :

Alliance + Leicester Direct ISA @ 5.40% now, but will they adjust rate in line with Base Rate changes? - key features :
- penalty-free withdrawals
- start saving from £1 - £3,000 in the tax year
- serviced via online banking or telephone
- ISA transfers from another provider are permitted
- £25 fee to transfer to another ISA provider

Abbey Postal ISA @ 5.35%, but horror stories abound of Abbey blunders re transfers from existing ISA providers - key features :
- penalty-free withdrawals
- start saving from £1 - £3,000 in the tax year
- open in branch or by post
- further deposits are by post or regular Standing Order
- withdraw by post
- ISA transfers from another provider are permitted


Personally, I am underwhelmed by all the above. Compiled it partly to help me choose a Mini Cash ISA for the new tax year, and partly to help fellow MSEs. Input from others warmly invited...

Monetary Policy Commission decision due 7th April - perhaps a Base Rate rise will occur, spurring ISA providers to create better offers.

QuidProQuo

Thanks for the info ED

I fall into category 3 and like you say haven't seen anything to get excited about just yet

Currently looking to improve on IF's 5% hopefully more tempting products will become available soon

deemy2004

ED wrote:

3 categories of ISA (Mini Cash) saver :-
Monetary Policy Commission decision due 7th April - perhaps a Base Rate rise will occur, spurring ISA providers to create better offers.

No .. Not until after the next election.. literally a week after !

ED

If the Monetary Policy Committee is truly independent, maybe a Base Rate rise could occur this Thursday...

If MPC isn't so independent and wants to please the Government, perhaps a Base Rate rise would be delayed till June. Media pundits predict the General Election for the very same day as the following Base Rate decision day, 05/05/05! Voters may be swayed if at 12noon that same day they hear their mortgages are going to rise!

R.Sole - It's frustrating many bank and bdg society sites don't yet announce ISAs for the '05/06 tax year.

Paul_Varjak

I think it is often best to go with your existing provider for and new ISA. You can transfer the money in without going through the application process and so start earning tax-free earlier. This is particularly so if you have other savings with your ISA provider that you can move immediately on April 6th.

I have both a Halifax ISA and Halifax bank account. The ISA pays 5.15% but without penalties for withdwals etc. Yes, I could earn 5.4% with A&L but A&L are promoting themselves at the moment, so the interest rate will probably fall. The A&L ISA would give me £7.50p/year more than the Halifax ISA so it would take quite a time before it outweighed the £25 withdrawl penalty.

ED

Paul Varjak - sounds like you are doing well. I too believed, until recently, "it is often best to go with your existing provider for (a) new ISA". Sadly, I've done less well than Halifax ISA customers. My provider pays only 5.20%. Their rate was highly competitive every year, until last summer, when they failed to pass on the full Base Rate quotient.

This prompts me to seek a fair paying, reliable home for a large sum currently in the ISA account + identically rated TESSA-only ISA.

Anyone know if Lambeth Bdg Soc are allowing '05/06 opening of the Postal ISA that offered 5.65% as at last autumn (including 6-month bonus)? Their site has excluded it for a while, but perhaps they aim to relaunch on April 6th? No response to my email of 12 hours ago (guess they are busy opening their lower paying ISA for people just in time for the final hours of the '04/05 tax year!)

deemy2004

ED wrote:

If the Monetary Policy Committee is truly independent, maybe a Base Rate rise could occur this Thursday...

If MPC isn't so independent and wants to please the Government, perhaps a Base Rate rise would be delayed till June. Media pundits predict the General Election for the very same day as the following Base Rate decision day, 05/05/05! Voters may be swayed if at 12noon that same day they hear their mortgages are going to rise!

R.Sole - It's frustrating many bank and bdg society sites don't yet announce ISAs for the '05/06 tax year.

If the election falls on the same day than the meetign would be postponed until the following week so there is NO chance of a rate decision on the day of the election... Unles something akin to Black Wednessday (ERM) happens, which is a once in a decade event, so low probability.