What is the best ISA for me?

Alex92_2

I want an EasyAccess ISA that allows me to put in deposits from my main current account each month and has an online banking system with decent interest %.

Once I have got the ISA yearly limit in, when the new tax year comes around 13/14 I will look at transferring the existing 5600 into a 2 year fixed interest ISA with another 5600 lump sump. So have £11200 in 2 year fixed ISA.

What is best for me until April. I was looking at M&S and Virgin Money.

Virgin Easy Access Cash E-ISA Issue 2 - 2.4%


M&S Cash ISA, although from December 11th or 12th its going from 3% down to 2.75%.


To be honest, not overly fussed about this years ISA interest rate as A) Wont be putting in a lump sum of 5600 , would be putting in maybe 2k initially and then 1k each month.

All the ISA rates are lower than they will be come feb-april time. And thats when im going to be looking at my 2 year fixed rate.


Thanks in advance,

Alex

psychic_teabag

If you need easy access only to allow additional deposits, rather than for withdrawals, you could consider a notice account. I think Coventry are offering 3.25% for a 60-day-notice account. So you could just put in your notice at the start of February and transfer at the start of April.

Not sure why an online banking interface is needed : for deposits you don't need to use their interface (unless you want to pull via D/D rather than push into an account number), and when you come to transfer, you don't deal with the current provider. But obviously makes it easy to check the current balance.

Alex92_2

psychic_teabag wrote: »

If you need easy access only to allow additional deposits, rather than for withdrawals, you could consider a notice account. I think Coventry are offering 3.25% for a 60-day-notice account. So you could just put in your notice at the start of February and transfer at the start of April.

Not sure why an online banking interface is needed : for deposits you don't need to use their interface (unless you want to pull via D/D rather than push into an account number), and when you come to transfer, you don't deal with the current provider. But obviously makes it easy to check the current balance.

I like being able to see where my money is and what is happening to it. If it suddenly went to £0 balance for whatever reason, I wouldnt be notified about it unless I called them up and checked. Just prefer online banking.

If I had an ISA with Coventry, it says interest is paid annual from when account has been opened, but I dont plan on keeping it there any longer than April. Does this mean monthly interest would be best option for me?

innovate

Alex92 wrote: »

If I had an ISA with Coventry, it says interest is paid annual from when account has been opened, but I dont plan on keeping it there any longer than April. Does this mean monthly interest would be best option for me?

When an ISA is closed (e.g. by a transfer), outstanding interest accrued up to the closing day will be paid, unless you have requested the transfer/closure before any notice period or maturity is reached. It doesn't matter whether the interest payment arrangement was annual or monthly.

psychic_teabag

The only thing to watch out for is if a bonus payment is paid on the anniversary of opening. Such accounts are relatively rare, but they do exist. Normally, the bonus is just in the form of a higher interest rate during the first year, and you qualify no matter how briefly the account is open for.

Alex92_2

So, which would the best ISA be for me that was easy access. M&S ?

I dont like the idea of the 60day notice, seems like a lot of faffing.:o

innovate

Having seen various posts of people not being able to get through to M&S banking in a reasonable time, I personally wouldn't touch them.Also not sure whether you'd get caught out by the interest rate cut as an existing ISA holder - - I seem to remember having read something about it. I'd use the Coventry, even if it involves having to give notice, simply on the grounds that it pays the best interest.

Alex92_2

innovate wrote: »

Having seen various posts of people not being able to get through to M&S banking in a reasonable time, I personally wouldn't touch them.Also not sure whether you'd get caught out by the interest rate cut as an existing ISA holder - - I seem to remember having read something about it. I'd use the Coventry, even if it involves having to give notice, simply on the grounds that it pays the best interest.

With the 60 day notice, I wont want to withdraw it, i'd want to transfer it, does that mean i'd have to find my 2 year fixed rate ISA (starting in April) in Feb time and withdraw it into that? What happens if the 2 year fixed rate isa I want to use isnt advertised until April?

I feel that I cant really explain this in writing very well. I'm just a bit concerned about being able to transfer the money over to a better rate ISA on April 6th for 2 years.

Alex92_2

Spoke to a Lady at Coventry via email, but she just said "if you want to take money out of the ISA and make a withdrawl, you have to give 60 days notice" :mad:

Noble_Savage

If you're transferring your money to a different ISA elsewhere, that's classed as a withdrawal, so notice periods will apply.

psychic_teabag

I assume you give Coventry notice in February before you've chosen the destination. i.e. that giving notice is a separate operation from the actual transfer. It depends on how Coventry's notice system works : is there a small window after 60 days during which you can withdraw / transfer, or once the 60 days are up, do you have as long as you want to access the money ? Ah - the website says you have 14 days to access the money.

One possible approach is just to first transfer it to an instant-access ISA, and from there transfer it to fixed. Some providers can convert ("redesignate") an instant-access ISA into a fixed-term ISA without the need to transfer. e.g. Halifax have definitely done this in the past - there is/was a form on the web page to let you do it. So if you have an inkling who you'll take the fix with, you could transfer to one of their instant-access, and then convert it from there.

Or maybe Coventry can convert it to an instant-access ISA after the notice, and then you're free to transfer it out at your leisure.