Nationwide Fixed or Kent Reliance?

info_addict

Hi,

I have about £3,610 in a Nationwide Members Isa Bond, currently earning 5.60%.

Do you think I should transfer it into their new 1 year fixed rate at 6.05% (no notice required), or give 60 days notice and transfer it to my Kent Reliance (5.96% variable), which I have just opened with my other transfers?

Or just leave it and wait a few more months to see what happens with the BOE rate?

Milarky

Nationwide fixed for 1 year (365 days)

K.R. at 5.96% now. Assume two more rises in the BOE rate in next 12 months. Assume you switch 1 July

Bank of England rates:
5.5-->5.75% in August
5.75-->6% in December

Assume KR raises rates in September and January in response (full 0.25%)

KR will average 2 months @ 5.96% + 3 months @ 6.21% + 7 months @ 6.46% . That's 6.31%

However KR will lose you 3 days interest on the transfer at least (because they don't treat the cheque they receive as cleared for that time) plus 1 day for the postage from Nationwide. Thus you lose 4 days @ 5.60% (6 if there's a weekend involved) by the transfer - that's equivalent to minus 0.06%

So Nationwide 6.05% guaranteed. KR to average 6.25% assuming two more rises in BOE fully matched.

For the sake of +0.2% (additional to the +0.45% for switching withing Nationwide) you do also get instant access with KR (in case you want to move it again in the 12 months for instance)

BTW you don't need to give Nationwide any notice to transfer your ISA (I had the bond too and was able to move without notice or penalty.) '60 days' only relates to withdrawals. Check this with the new Bond's conditions however as I wouldn't expect that transfer option to still be there.

Slim

I had a Nationwide Members' Isa Bond and was able to transfer it to another ISA provider without giving the 60 days notice and without any loss of interest. I was told that the penalty payment only applied to cashing it in.

bristolleedsfan

just out of interest milarky do u know y isa transfers arent conducted electronically ?

when someone transfers an isa can they give instructions to their isa provider to fulfill the isa transfer on "a" monday to avoid loss of interest over a weekend ?

on the point of kent reliance building society, some may be interested in this virtual viewing :rotfl:

http://www.internetbuildingsociety.net/

Rhino666

I don't think that in the current interest rate environment that 6.05% is enough to tie your money up for a year. Non ISA rates are as high as 6.45% for one year fixed at the moment and another 0.25% rate rise is expected very soon.

I had a quick look on moneyfacts and it appears that there are better fixed rates around for transferred cash ISAs but not good enough IMO.

http://www.moneyfacts.co.uk/searches/savingsresults.aspx?age=0&noFixedTerm=0&accounttype=97&investment=3500&pageid=7&monthlyInterest=0&currency=GBP&noticedays=365&instantaccess=0

info_addict

Thanks to all.

Just to let you know I have transferred to Kent Reliance and you were all correct - there isn't any penalty from the Nationwide for transfers.

Careful_ly

info_addict wrote: »

Thanks to all.

Just to let you know I have transferred to Kent Reliance and you were all correct - there isn't any penalty from the Nationwide for transfers.

Just to let you know this wont be a quick transaction, Nationwide have a major delay in the ISA department, my transfer out has not happened yet, and they are currently dealing with paperwork dated 26th April
I was also given incorrect information, in branch, on the 60 days notice on the Members bond being required and gave notice in early March.:mad: