Cash Isa - Santander Direct ISA Saver

mike6329

I'm looking into transferring my exisiting ISA to the one mentioned above which pays 2.5% variable for the first 12 months.

I was all ready to go ahead with it but then thought about the 'variable' element. Is my understanding right in that the 2.5% on offer is the maximum which I will receive, but more than likely I will recieve a much lower rate?

If so, what current rate can I expect to receive?

Thanks,

Mike

innovate

You will get 2.5% AER until they notify you that you will get a lower rate.

Historically, Santander have left existing ISAs to run their course on the same rate, and announced a new issue with a lower rate for new applications. No guarantee they will keep this practice.

Gizmo247

I'm wondering if Santander are beginning to change their approach to legacy rates.

Just got a leaflet through the door today saying they are going to re-designate all their legacy ISAs into just two "Easy ISA" and "ISA Saver" from 1 June 2013 or after bonus period (which ever is later).

As a result, some legacy ISA rates (probably moving to ISA Saver) will improve under a tiered rate. i.e.

£1+@0.50%, £10,000+@1.50%, £25,000+@2.00%

phona

The Santander Direct ISA Saver runs the rate of 2.5% AER variable for the first year. Then the account becomes an ISA Saver with a current rate of 0.5-2.0% depending on balance.

After 12 months the account will revert to an ISA Saver, rate currently paying 0.50% AER tax free (variable) for balances of £1+, 1.50% AER tax free (variable) for balances of £10,000+ and 2.00% AER tax free (variable) for balances of £25,000+

But during the first year Santander may decide to change the rate, since it's variable. As this is not a fixed term account they have the right to do this, but you also have the right to transfer your money if they do. You'll want to move it after a year or if you find a better rate anyway - just remember to use the correct transfer procedure!