Why upgrade to Santander Direct Saver from FRISA?

Looter

I've got a FRISA maturing on 1st July with Santander paying 4% interest but they are offering a Direct Saver ISA paying 1.7% interest which I am eligible to upgrade to within 28 days of maturity.

I am just wondering why would anyone want to do this, given the lower rate of interest offered? Am I missing something?

eskbanker

Looter wrote: »

I've got a FRISA maturing on 1st July with Santander paying 4% interest but they are offering a Direct Saver ISA paying 1.7% interest which I am eligible to upgrade to within 28 days of maturity.

I am just wondering why would anyone want to do this, given the lower rate of interest offered? Am I missing something?

Presumably if you leave the funds in the FRISA they'll pay an even more derisory interest rate (if any), so that's why they'll present the 1.7% as an 'upgrade', i.e. they're comparing 1.7% with 0.n% not with 4%....

datostar

Santander's maturing FRISAs go into a different instant access ISA paying tiered interest rates, maximum of 1.5% for balances over £25,000 if you don't take any action. 1.7% is better than that, or you could 'upgrade' to the current 2 year FRISA at 2% I believe (2.3% if you've got a 123 current account unless they've dropped it recently). Have a good look around the website to see what they've got and what the rates are. Upgrading is easy, either over the phone or online, but don't do it before 2nd July!