Checking on opening new ISA question, fixed or not. 26 January 2014 at 3:52PM edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings 8 replies 738 views

isayhello

Hi, I haven't used my isa allowance for this year yet and am going to get one.

Just trying to decide between a 1 year fixed one or an easy access one.

The rate difference is 1.85% to 1.75%, but if I understand it correctly, if I get the fixed one then its stuck there for a year. I'm thinking it must be better to get the variable rate one, even if it drops because in the new year there could be better isa deals and I can transfer this isa in along with any others I have.

Also, do all isas have to be transferred in at the same time as my existing fixed rate one might be fixed till June I think.

Thanks

Archi_Bald

If you believe there will be much better rates around April time, why not just put your money into an interest-paying current account until then?

isayhello wrote: »

Also, do all isas have to be transferred in at the same time as my existing fixed rate one might be fixed till June I think.

It depends entirely on the T&Cs of the ISA you are transferring into. If it is an instant access one, you can transfer in when you like, and any number of times. If it is a fixed-term one, you probably just have a fortnight for any transfers in.

But you also can continue to have any number of ISAs if they are simple transfers from existing ISAs.

AndyPK

I would go for that post office one.
2 yr 2.25%

isayhello

Hi, well this way I can build up the amount I have in my isa than if I go into a savings account. Not sure if that's the wrong way to think about it though.

isayhello

That seems like a good one, I was just thinking perhaps there might be a few higher than that in the new tax year.

AndyPK

I wouldn't count on it.

And if the last 2 years are anything to go by they drop if anything

MoneySaverLog

Unemployment has dropped close to the 7% trigger level where BoE have said they would increase the base interest rate. So I would expect them to go up eventually, how soon is anyone's guess. Locking in a fixed rate ISA for a long period of time may see you come unstuck if that were to happen.

rb10

MoneySaverLog wrote: »

Unemployment has dropped close to the 7% trigger level where BoE have said they would increase the base interest rate.

Not quite ... the Bank said they wouldn't increase Base rate before unemployment falls below 7%, not when unemployment falls below 7% we'll increase Base rate.

The drop in unemployment has come about rather faster than most expected. I don't think we'll see any interest rate rises until next year, at the earliest.

Archi_Bald

isayhello wrote: »

Hi, well this way I can build up the amount I have in my isa than if I go into a savings account. Not sure if that's the wrong way to think about it though.

I haven't explained this properly.

Normal savings accounts pay terrible interest rates right now and shouldn't figure in anyone's savings plans.

Use current accounts as savings accounts. If necessary, use them separately from your current account you use for regular spending / bills.