Yorkshire Bank ISA - thoughts please

libra10

We have been looking at best (N)ISA rates to transfer a couple of ISAs which have matured, and the rates dropped.

Yorkshire Bank offer an ISA, at 2% interest rate, 40 days withdrawal notice, which seems quite a good rate considering we do not want to tie up the money for long.

Just wondered whether anyone knows any better deals.

Money in the bank is presently covered by the UK compensation scheme. However, the bank is affiliated with Clydesdale Bank and an international bank, based in Melbourne.

With Scotland deciding whether to go independent next Month, if the consensus was 'yes', wondering how this would affect banks tied up with Scottish banks (regarding compensation).

Would be grateful for your thoughts.

bowlhead99

If it's covered by the UK scheme you are fine. If 'affiliated' with the Clydesdale means they are sharing scheme limits (I haven't looked into it), then simply, don't have more than the limit deposited across those two places.

Being 'tied up with Scottish banks' doesn't really seem a problem. If the vote next month says the Scots don't want to be part of the UK it will take a long time to disentangle and carve up the UK through implementing legislation and regulation and you are not going to lose your money at Yorkshire either way.

Not aware of an ISA with a better rate than 2% for access within a month or two (unless you are already in one or get a special offer on a maturing product that isn't available for new customers). That would be a pretty decent rate even for a one year fix. Just be aware you do need to get the account balance over £24k to qualify for the 2% - you mention 'we have been looking' and of course if you had say, £12k each, you won't get that top rate, only 1.5% which you could probably achieve elsewhere.

If there's a chance you don't really need it back, you could consider a long fix at Skipton for 2.75% on a five year account that allows you to break and pay two thirds of a year's interest as a penalty if you wanted it back. That would net you an effective rate of almost 2% after 2 years and more if you held for 3, 4 or the full 5. But to be honest there is no point trying to dodge around to get the absolute best rate and take on the threat of penalties, when you don't really want to commit more than a month or two ahead. In that case it's better to be flexible, and then if the market rates go up and you know you still don't need the money, you can shop around again later.

libra10

Thank you bowlhead99 for your informative reply. Much appreciated.

The amount invested would be eligible to earn the 2% interest rate, the money transferred from a couple of Nat West ISAs which have matured, and now earning a lower rate.

If there's a chance you don't really need it back, you could consider a long fix at Skipton for 2.75% on a five year account that allows you to break and pay two thirds of a year's interest as a penalty if you wanted it back. That would net you an effective rate of almost 2% after 2 years and more if you held for 3, 4 or the full 5. But to be honest there is no point trying to dodge around to get the absolute best rate and take on the threat of penalties, when you don't really want to commit more than a month or two ahead. In that case it's better to be flexible, and then if the market rates go up and you know you still don't need the money, you can shop around again later.

I looked at Skipton, but don't want to fix for longer than one or two years (at most). Mainly due to uncertainties whether the interest rate will eventually rise.

Thank you very much for your comments, much appreciated.

kar999

I opened their 1.75% ISA fixed to Dec 2015 on Monday but the branch rang me up about this account that superseded it today. As I was in the 14 day period I've cancelled the 1.75% and opened this 2% fixed till Aug 15.

It looks like one of the Best Buys for short term fixes and transfers in so I don't expect it to be around long. I might be tempted to shovel in more cash rather than my just my original transfer in.

EDIT: I'm talking at cross purposes here .. I'm quoting the Yorkshire BUILDING Society Isa which launched yesterday but is 2% on any amount.

libra10

Thanks kar999 for your comments.

My major concern about the bank was what would happen with regard to the UK government compensation scheme in the event of Scotland voting for independence.

I suppose if that were the case, quite a few banks would be affected.

colsten

libra10 wrote: »

My major concern about the bank was what would happen with regard to the UK government compensation scheme in the event of Scotland voting for independence.

There is no UK Government compensation scheme - the FSCS is an industry funded scheme. The financial services firms are obliged to be part of it if they wish to have a full UK licence.

http://www.fscs.org.uk/industry/about-fscs/
http://www.fscs.org.uk/industry/about-fscs/organisational-information/how-we-are-funded/

Of course, if Scotland left the UK, they needed to decide whether and how they would provide any guarantees to savers of banks authorised in Scotland, and or whether these apply to scottish residents only. As Scotland wish to be part of the EU, they would need to have something comparable to the FSCS, as this is basically the minimum standard throughout the EU (the EU actually set the €100K standard that led to the upping of the UK scheme from £50K to £85K).

This issue is just one of thousands of individual items that would need to be discussed in detail, and then get implemented according to agreements reached, and new scottish offerings being developed. All this would keep armies of people way from working on any real progress for years so I somewhat hope it won't happen. On the other hand, I'd quite like to see how the Scots would fund the entire extravaganza, and how many years it would take to complete the separation.

kar999

I've amended my post as I was talking about the Yorkshire Building Society 2% ISA just launched !

http://www.ybs.co.uk/savings/tax-free/fixed-rate-isa-31082015.html

libra10

Thank you colsten and kar999 for your comments.

Very interesting reading, lots to consider.

Eco_Miser

bowlhead99 wrote: »

If it's covered by the UK scheme you are fine. If 'affiliated' with the Clydesdale means they are sharing scheme limits (I haven't looked into it), then simply, don't have more than the limit deposited across those two places.

Yorkshire Bank isn't 'affiliated' with the Clydesdale, it is the Clydesdale, under a different trading name, so obviously shares the same scheme limits..

ScoobyZ

Looks like a good ISA @ 2%.

Only thing to make sure is that you give 40 days notice. If you don't they transfer it to a normal Easy Access ISA.

ScoobyZ

Looks like it has disappeared from the site now.

Update.

Dooh no it's here doh

http://www.ybonline.co.uk/personal/savings/tax-efficient-savings/cash-isa-40-day-notice/

Might put a new thread up with details.