To Fix or not To Fix? That ISA Question...

bgscotty

Hello all!

I'd be grateful for some advice to a newcomer to the forum...

I currently have invested, in this financial year, £3000 into a new NS&I Direct ISA (6.05%).

I already have built up, over the last two financial years, £6281.06 in the Alliance & Leicester Direct ISA 2.

After a weekend of researching, I've come across two of the highest interest ISAs which allow transfers-in of previous years' subscriptions:

1. Kent & Reliance Building Society- 5.96% variable
2. Marks & Spencer- 6.16% fixed for one year

What would be really helpful to know is:

Firstly, which of the two ISAs above offers the best option, with reference to any trends relating to ISAs and interest rates?

I do not need access to the funds during the year.

Secondly, are there any better transfer-in ISA deals available or alternative actions I could take to be even more cost-effective?

Thirdly, for the avoidance of my own doubt, what exactly do I need to do to transfer previous year's ISA funds from an existing provider to a new one, and is there anything I need to watch out for to make the transfer-in process as smooth as possible?

I'd appreciate any comments or advice to help me make the most cost-effective decisions possible.

Thank you all in advance.

Scotty

dancingfairy

Interest rates are expected to rise soon so I personally wouldn't go for a fix - but you never can tell what will happen with the rates.

In order to trasnfer an ISA you go to the new provider and ask to transfer your old one across.

Don't know how good Kent Reliance are at passing on base rate changes though - maybe someone else does?

debbie42

dancingfairy wrote: »

Don't know how good Kent Reliance are at passing on base rate changes though - maybe someone else does?

I don't know personally, but the consensus on here seems to be that they are pretty good.

If it was me, I wouldn't fix it either.

MiserlyMartin

Ditto. Now is not the time for fixed rate savings, rates are likely to carry on going up. We are moving out of a low interest rate environment and about time too.

ManAtHome

KR have announced their ISA rate will be going up to 6.21% (on This is Money site), didn't give a date though.

pbw

ManAtHome wrote: »

KR have announced their ISA rate will be going up to 6.21% (on This is Money site), didn't give a date though.

according to moneyfacts, the new rate takes effect from 01/08/2007

tipsychick

Kent Reliance are pretty good. They've passed on the last five BOE interest rate rises and were very quick off the mark announcing the latest this week.

I transferred from A&L to Kent Reliance a couple of months ago. Remember that you have to notify A&L that you want to transfer out by telephone.

I'd get the new a/c number from Kent Reliance and call A&L on 0800 068 8638 with the new details. (Remember to stress the whole way through that you are transferring out, not shutting the ISA down).

If you wait for Kent Reliance to contact A&L by post, you'll then get a smug letter from A&L saying that you've got to phone them to do the transfer and the whole thing is delayed by a couple of weeks.

TomsMom

tipsychick wrote: »

Remember that you have to notify A&L that you want to transfer out by telephone.


If you wait for Kent Reliance to contact A&L by post, you'll then get a smug letter from A&L saying that you've got to phone them to do the transfer and the whole thing is delayed by a couple of weeks.

Sorry to disagree tipsychick. I transferred out of A & L at the end of May into Abbey. I said to the chap at Abbey that I understood I had to ring A & L about transferring and he said no, we do that. When I said I'd seen it on A & L's website (under FAQ) he said they had never had any trouble with A & L transfers.

Well, everything went very smoothly and by the middle of June Abbey ISA was opened and A & L did not contact me at all, everything done by Abbey as he said.

I think it was in another thread on this forum that recently A & L had changed their policy and customers no longer have to ring them.

tipsychick

TomsMom wrote: »

Sorry to disagree tipsychick. I transferred out of A & L at the end of May into Abbey. I said to the chap at Abbey that I understood I had to ring A & L about transferring and he said no, we do that. When I said I'd seen it on A & L's website (under FAQ) he said they had never had any trouble with A & L transfers.

Well, everything went very smoothly and by the middle of June Abbey ISA was opened and A & L did not contact me at all, everything done by Abbey as he said.

I think it was in another thread on this forum that recently A & L had changed their policy and customers no longer have to ring them.

Sounds like it might have changed since I transferred out in late April. Kent Reliance did say they'd take care of it all but I still got a letter from A&L saying I had to phone in to do it.

Might be worth a telephone call to A&L just to double check, as it did add a delay of three weeks or so to my transfer.