Top Cash ISAs Discussion Area

Saver121

Are Easy Access accounts virtually like 1-Yr Fixed Rate accounts now?

Ie. I learned recently that if I withdrew funds before 12 months were up (on an Easy Access Cash ISA with a 12month bonus rate) then I would forfeit the bonus amount on the entire account, regardless of the amount withdrawn.
As the current 'Best Buy' Easy Access accounts all include temporary bonus rates (which without, are not much above zero), they you are effectively locked in for the period, OR you loose most the the interest due if you need to make a withdrawal, in the case of an emergency.

This being the case, are you just as well off getting a Fixed Rate ISA?

Ie. If you don't need the funds within a year then you will have received the best rate (better than Easy Access) for the term, and if you DO suffer an emergency and need to take funds out before 12 months, then all you'd lose is the interest (which is the same as the Easy Access scenario above).
...Sounds too simple though - what am I missing?

Many thanks.

badger09

Saver121 wrote: »

Are Easy Access accounts virtually like 1-Yr Fixed Rate accounts now?

Ie. I learned recently that if I withdrew funds before 12 months were up (on an Easy Access Cash ISA with a 12month bonus rate) then I would forfeit the bonus amount on the entire account, regardless of the amount withdrawn.
As the current 'Best Buy' Easy Access accounts all include temporary bonus rates (which without, are not much above zero), they you are effectively locked in for the period, OR you loose most the the interest due if you need to make a withdrawal, in the case of an emergency.

This being the case, are you just as well off getting a Fixed Rate ISA?

Ie. If you don't need the funds within a year then you will have received the best rate (better than Easy Access) for the term, and if you DO suffer an emergency and need to take funds out before 12 months, then all you'd lose is the interest (which is the same as the Easy Access scenario above).
...Sounds too simple though - what am I missing?

Many thanks.

Could you tell us exactly which ISA this is? This would be unusual on an instant access account.

I answered a similar question from another poster recently. Basically she had misunderstood what she had been told by WestBrom. They had said that if she withdrew some funds before the 12 month bonus expiry, then she would would not qualify for the full 12 months' bonus on the amount withdrawn, which is obvious really. Money taken out of the account doesn't continue to earn any interest at all, let alone at the bonus rate :rotfl:

savemoney

rangel583 :spam:

ejv

Why First Direct has advertised an ISA with 3.00% AER but 2.96% tax free? I thought all ISAs were tax free:huh:

adamv

So much talk of interest rates - am very confused.:o

I currently have a 'savings pot' within a tracker mortgage. The current interest rate on the mortgage is 1.25% (0.75% above base rate - great I know!) But from the point of view of savings, it's pretty poor.

Question - Would I be better off taking a lump of my savings (say £5k) and putting it in a Cash ISA where I'll get 3% or above?

Consumerist

adamv wrote: »

I currently have a 'savings pot' within a tracker mortgage. The current interest rate on the mortgage is 1.25% (0.75% above base rate - great I know!) But from the point of view of savings, it's pretty poor.

Hi adamv, and welcome to the forum.

Do you mean your savings are in an offset mortgage account which charges 1.25% for the mortgage and therefore effectively "pays" 1.25% interest on overpayments into the account?

If that is the case then you would do better by putting up to £5,640 into an ISA (you should be able to get around 3% at the moment). If mortgage interest rates rise - and they will eventually - you should be ready to consider moving your savings back to the offset mortgage to maximise your return at a later date.

portlandboy

Just opened an M&S Cash ISA (at 3% variable) and the confirmation letter came in the post today. It just happened to include a mention that the rate will drop to 2.75% in December.
I realise that variable rates can fall or rise, but it seems a bit of a one-sided deal to drop the advertised rate when the base rate is not predicted to fall. Still, I'll just have to transfer it to the 1 year fixed rate of 3.1%.
Reminds me of the NatWest ad from a while back where they catch you, reel you in then leave you in their net.

innovate

portlandboy wrote: »

Just opened an M&S Cash ISA (at 3% variable) and the confirmation letter came in the post today. It just happened to include a mention that the rate will drop to 2.75% in December.
I realise that variable rates can fall or rise, but it seems a bit of a one-sided deal to drop the advertised rate when the base rate is not predicted to fall. Still, I'll just have to transfer it to the 1 year fixed rate of 3.1%.
Reminds me of the NatWest ad from a while back where they catch you, reel you in then leave you in their net.

You might find better rates elsewhere - things keep changing all the while https://forums.moneysavingexpert.com/discussion/401374

Rates have historically been best in the "IS season" (March/April/May) - so may be wait until then before committing. Of course, history is not guaranteed to repeat itself.....

riahold

Hi I'm sort of confused on the best place to put my grant money from uni. I've just received it and i don't no whether to put the money in a fixed rate tax free ISA, fixed rate savings account of a growth bond. I'm very confused and I can't really tell the difference could I have some help please ? Thanks x

Consumerist

riahold wrote: »

Hi I'm sort of confused on the best place to put my grant money from uni. I've just received it and i don't no whether to put the money in a fixed rate tax free ISA, fixed rate savings account of a growth bond. I'm very confused and I can't really tell the difference could I have some help please ? Thanks x

If you will definitely not need access to the money for a year then a 1-year fixed-rate ISA might suit your needs. Otherwise, I would suggest putting as much as you can, up to £5,640, into a variable-rate ISA; the rate will be a tad lower but you will be able to access your funds. Look for the best rate available from standard savings accounts for any surplus.

Bonds are really better suited for medium- to long-term savings rather than instant access. I would suggest avoiding them for your purposes.