Help me choose- Al Rayan, Danske, Skipton, Nationwide, ?

pavane

Hello,

I seek your opinion on choosing a provider to combine my cash ISA. Before we begin, I have read the main articles and threads on this site so have narrowed down the list. Please do not question why I'm investing in a cash ISA, whether I'm aware of high rate current accounts, etc. I know these are asked to help/educate but are irrelevant in my case.

I currently have 15,150 in a Lloyds cash ISA. This is the 15,000 max allowance from last year (2014/15) plus the interest paid out the other week. The rate was only 1.25% to begin with and will drop to 0.5% in a few weeks. I had chosen Lloyds due to convenience at the time, 0.5% is unacceptable so I will move. I intend to invest the full 15,240 for this (2015/16) year as well, an extra 1% on the total 30,000 is a significant extra 300 on interest justifying the move.

My requirements are:
1) must have online access
2) the online access must be reliable ie. not like Post Office
3) must allow transfers in
4) preferably without introductory bonus artificially propping up the rate the first year
5) preferably a provider that doesn't change rates more often than industry average
6) up to 60 days notice

1 and 2 are key. I gave Post Office as an example, no point having an "online" account if you can't transfer money out, have to write letters, etc.

On 3,4,5, given the rate differences I'd prefer to consolidate and keep, I wouldn't move for a 0.1-0.2% gain which is about all you get among competitive rates.

On 6, I see ISA as my as backup money, I don't want to fix it for a year as I may use it for buying a flat.

Al Rayan Bank (formerly Islamic Bank of Britain) [120 Days' Notice] ISA - 2.02%
1) They seem to be fully covered under UK FSCS so no risk as I understand it.
2) I wouldn't normally consider a provider like this but the rate is significantly high and got my attention. There doesn't seem to be any tricky bonus, they say they "target" that rate but that is just the marketing speech to make it "Islamic" compliant, isn't it?
3) It seems transferring out (without notice) could be a workaround to the 120 days notice which is longer than I'd want.
4) This rate is lower than their 1 year fixed term 1.9%. This doesn't make sense. Is it a suggestion they will reduce the rate once they grab customers? I could not find their historical rates so I don't know if this is just a marketing campaign to lock in customers.
5) Anybody use them? How is the setup process and online experience? Should I stay clear or consider? An extra 0.5% is appealing but not if it will be a huge pain to deal with them.


SKIPTON BS 1.6%
1) their usual/other accounts have 0.5% bonus, I'm concerned they'll drop rate after they grab customers.
2) no experience with them. Are they and their online system OK?


DANSKE 1.6%*

*The rate will be 1.75% until June, when it drops to 1.6%.

1) no experience with them. Are they and their online system OK?


NATIONWIDE 1.5%

This is my backup option. I bank with them and am happy with the online experience. Compared to the 1.6% options, the loss of an extra 0.1% is trivial. My only hesitation with Nationwide is the existence of other accounts which would push me above the 85,000 FSCS limit in about 2 years. (This is the reason I'm not looking at the Virgin Money 1.65% with 60 days' penalty.) 2 years is a fairly long time and the interest rate picture should be different by then so not a major concern and if I'm unable to choose I feel I'll just go with them for now.

What do you think?

Thanks!

AndyPK

I opened a skipton 1 year ago. No complaints.

I also use nationwide.

gt94sss2

I haven't come across Danske before - I see its a NI HQ'ed institution and protected for deposits.

Skipton and Nationwide should both be fine for your needs.

My personal preference would be the HSBC Save Together option which pays 1.5% + £120 if you qualify to open a free HSBC Advance Account and are willing to do so. I think this would also give you the highest interest rate once you take the £120 into account.(1.8-9%?)

Regards
Sunil

pavane

AndyPK wrote: »

I opened a skipton 1 year ago. No complaints.

I also use nationwide.

Thanks. Have you done any online management like transfer in, out, add money or just accessed to log in to view?

gt94sss2 wrote: »

I haven't come across Danske before - I see its a NI HQ'ed institution and protected for deposits.

Skipton and Nationwide should both be fine for your needs.

My personal preference would be the HSBC Save Together option which pays 1.5% + £120 if you qualify to open a free HSBC Advance Account and are willing to do so. I think this would also give you the highest interest rate once you take the £120 into account.(1.8-9%?)

Regards
Sunil

Danske is a big bank, I'm sure we have some MSE members using them. For comparison, in GBP:

SKIPTON : 22M annual profit, 14MM assets
DANSKE : 372M annual profit, 335MM assets
NATIONWIDE : 900M annual profit, 193MM assets

AL RAYAN: 4M annual profit but the parent company (MASRAF AL RAYAN) is 375M annual profit, apparently second largest bank in Qatar but couldn't find too much more info in a 2 minute search

So, Danske is about 20 times bigger than Skipton, of course bigger isn't always better.

I'll wait for some more feedback, if I see more MSE votes for Skipton than I'd chose that over Danske and Nationwide to go against Al Rayan (formerly IBB) which is an extra 0.4% making it an interesting alternative to the other 3.

badger09

I've had fixed rate accounts (not ISA) with Skipton in the past.

Never had any problems.

colsten

Danske may want you to pop into one of their Branches, for example when they can't electronically verify you, or if you want to make an ISA transfer in. That's ok if you do live near one of their branches in NI.

Al Rayan unless I am mistaken, need you to open the ISA in Branch.

Nationwide apparently do send out letters to some people to ask them to appear in Branch to prove their ID.

Only Skipton, as far as I know, is fully online and/or postal based. I might be wrong though.

So it pays checking out whether you have a Branch within reasonable distance.

Usual MSE forum comment: are you sure a cash ISA is your best choice?

norm_

After HSBC save together, Clydesdale bank would be my choice. Yes the 2% rate doesn't kick in until 24k but you are getting 1.5% up until then.

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

And if you decide to join Clydesdale you might as well make use of their £150 current account switching bonus as you'll be setting up online banking anyway.

EDIT: If you take into account the switching bonus and the prospect of earning 2%, Clydesdale would trump HSBC.

pavane

All 4 have branches I could use, although Danske and Al Rayan are by far more limited (1 and 2 branches in London, respectively). Skipton and Nationwide have many more branch locations.

So it seems MSE is vouching for Skipton. I wouldn't dare go against MSE opinion with apparently unfamiliar Danske so we can drop it from the consideration.

I'm already a Nationwide customer and this would be my backup (slightly lower interest), given the good feedback on Skipton I'm willing to choose it over Nationwide, at least for this year.

I'll wait for some feedback on Al Rayan. Lacking positive feedback, if I go with Skipton:

1) If, for whatever reason, I don't like them could I transfer again during the same year? Is there a limit to the number of times I can switch provider?

2) What is the best order? Open account (and add some minimum requirement from this year or the full 15,240?) or first transfer then top-up?

3) Any idea when the 1.6% "limited" offer will end? Or if they will reduce the rate once it does?

Regarding HSBC and Clydesdale:

I don't want to bank with HSBC. They, along with First Direct (same thing?) were the only banks to decline my application for a current account. HSBC in particular has very odd customer selection practices, their branch was very rude.

Clydesdale is not online, only post/branch. I have previous experience trying to open a savings account with them over the post. I gave up after several weeks of waiting, 2 letters/posts and 3 calls.

colsten

Danske is just as fine as any other financial institution that has the FSCS guarantee

The main question you should ask yourself is whether a cash ISA is the best you can do for yourself.

brick

colsten wrote: »

Danske may want you to pop into one of their Branches <snip> if you want to make an ISA transfer in. That's ok if you do live near one of their branches in NI.

Danske absolutely require one to attend a branch meeting in order to initiate an ISA transfer in, at least at the present time.

pavane

After further reading, my position is unchanged from my last post, I'll give Skipton a try unless there is some good feedback on Al Rayan (Islamic Bank of Britain).