NS&I or Baclays

clare_r21

Hi ..just been reading about your Barclays V NS&I dilemmas..I'm still undecided,but to throw a spanner into the works,can I ask your opinions about the Abbey Super ISA 8.1%??

DawnW

trouble is, you have to put an equal amount of money in some sort of investment plan if you take this Abbey deal. Didn't like the sound of it.

clare_r21

yes,that is the downside,but i just wanted to know if i was able to invest the same amount,£3k in a year hopefully,if this was one of the best ways to do it...and still get the seemingly best ISA rate around? Tricky stuff this choosing the best ISA thing!!

masonic

It is the "seemingly" best ISA rate around. But you are only being paid that on half your money and only for one year. The other half effectively gets anything as low as 2.9% per year and you are locked in to those awful rates for at least 3 years.

Gordon_the_Moron

gogsboy wrote: »

Can someone explain what the issue is with Barclays, the deal looks good on paper.....so why not?

Thanks

The issue is Barclays rate is an introductory bonus, 6.5% for a year with a 1% drop after the first year (the rates may change in that time)

If after a year Barclays rate drops below that of NS&I and there is nothing better than NS&I on offer that allows transfers in you could then be losing out as you can move your money out of Barclays, but where to?

Only you can decide really because no-one knows what ISAs will be available in a years time that allow transfers in and no-one knows what the BOE base rate will be in a years time (I'd guess higher than it is now but that is only guesswork) and who knows what Barclays will do with their rate in the meantime, technically they could drop their rate on the tax beater to 1% next month and say they are paying 0% with a 1% bonus, though I can't see them doing that.

Da Moron

clare_r21

masonic wrote: »

It is the "seemingly" best ISA rate around. But you are only being paid that on half your money and only for one year. The other half effectively gets anything as low as 2.9% per year and you are locked in to those awful rates for at least 3 years.

Thanks Masonic...I guess the Abbey super ISA is not for me then...you're right..I would be better off going with Barclays ISA and putting any money saved(hopefully £3k in the tax year),into a high interest savings account..these 'super ISA' deals are obviously too good to be true!

MajorR

Gordon_the_Moron wrote: »

If after a year Barclays rate drops below that of NS&I and there is nothing better than NS&I on offer that allows transfers in you could then be losing out as you can move your money out of Barclays, but where to?

Da Moron

Then wouldn't you just open a new ISA with NS&I and leave the Barclays ISA where it was because by definition it would be the best ISA that allowed transfers?

What you're describing is the same scenario as this year with the Barclays that doesnt allow transfers in. What was the best deal this time last year? would you not have invested with it just because in 12months time there was going to be a Barclays ISA at 6.5%

You have got to go with the best at the time you invest and same for anything else you've built up, move it into the best ISA that allows transfers.

Kazza242

Gordon_the_Moron wrote: »

The issue is Barclays rate is an introductory bonus, 6.5% for a year with a 1% drop after the first year (the rates may change in that time)

If after a year Barclays rate drops below that of NS&I and there is nothing better than NS&I on offer that allows transfers in you could then be losing out as you can move your money out of Barclays, but where to?

It is true that the 1% bonus rate Barclays are paying on their Tax Beater ISA does expire one year after the account opening date. However, you could just transfer it to another provider. There are always very competitive ISAs launched especially around March/April each year, some of which accepting transfers in - so I don't see the problem.

As Barclays are only accepting new money this limits the amount of interest they have to pay out to customers. Therefore, I would be surprised if they reduced the Tax Beater ISA rate within the 1 year period. They would be effectively 'shooting themselves in the foot' if they did this - as customers could easily transfer out.

One point that doesn't seem to have been raised fully is that the NS&I rate guarantee (to pay BOE base rate + 0.55%) expires on April 5th 2008. If they don't issue a new guarantee, then the NS&I isa rate will revert to just 5.25% - or whatever BOE base rate is then. The Barclays ISA looks like the rate will be 5.50% after the 1% bonus has expired, if it isn't then customers can transfer out. I'm not trying to argue that one ISA is better than another here - but it just looks like some of the facts, when comparing the two, have been left out.

Gordon_the_Moron

The point I was making is you can't transfer into the NS&I ISA, so after the year where do you go? Is it worth the extra £20 you gain from Barclays (£20 more compared to NS&I) with the uncertainty at the end of the year.

Also, I can't see Barclays reducing the rate in the first year either but what wouldn't surprise me is if they leave it at 6.5% and don't pass on any rises in the interest rate.

Don't get me wrong I'm not saying DON'T go with Barclays, I am currently UNDECIDED what to do with next year's £3k, this year I have already put £3k in NS&I, do I put another £3k into that account or go with Barclays...

I'M GOING TO HAVE TO THINK ABOUT THIS FOR A WHILE, A FEW DRINKS MIGHT HELP ME DECIDE :beer:

trets77

One point that doesn't seem to have been raised fully is that the NS&I rate guarantee (to pay BOE base rate + 0.55%) expires on April 5th 2008. If they don't issue a new guarantee, then the NS&I isa rate will revert to just 5.25%

true but our PM in waiting has always been keen on us saving , so i doubt he will let his own departments pioneering ISA slip .

comes down to Trust and the Terms.

I trust NS & I to do whats best for the savers , not Barclays Shareholders.

i also don,t want to find a years allowance frozen out of NS & I because i trusted a bank not to "take me off the Hook and throw me in the keep net"

Barclays cannot even organise thier saver accounts to pay intrest correctly

http://forums.moneysavingexpert.com/showthread.html?t=406622&highlight=barclays+regular