Top Cash ISAs Discussion Area

DragonQ

zoebel wrote: »

At the time of writing the best rate on an instant access ISA is around 2% but the best rate on a five year fixed rate ISA is just over 3%, but with a withdrawal penalty of 180 days loss of interest. However there is no limit to the number of five year fixed rate ISAs you can open, subject to the total annual subscription. Am I being naive then to suggestion that you can gain an extra percentage whilst
still effectively having "instant access" by just having several fixed rate ISA's with small amounts in them?

You can do that on two conditions that I can think of:

- The money you split is only previous years' deposits
- The providers allow you to have multiple ISAs

I assume most companies won't let you have multiple ISAs so you'd need to open one per bank/BS. It's also not true instant access, it just means you can withdraw a smaller amount and face a smaller penalty. If you need all the money, the penalty is huge.

zoebel

[QUOTE If you need all the money, the penalty is huge.[/QUOTE]

I don't agree, the penalty on a 3% five year fixed rate ISA is 180 loss of interest, this means the rate goes down to 1.5%, this is nearly as high as the top instant access ISA of 2%, and that's only if I take out the lot! :beer:

rb10

zoebel wrote: »

I don't agree, the penalty on a 3% five year fixed rate ISA is 180 loss of interest, this means the rate goes down to 1.5%, this is nearly as high as the top instant access ISA of 2%, and that's only if I take out the lot! :beer:

That's only if you withdraw after exactly one year.

Withdraw after 6 months, and you get nothing.

Withdraw after 3 months, and you may get less back than you put in (depending on the T&Cs of the ISA).

DragonQ wrote: »

I assume most companies won't let you have multiple ISAs so you'd need to open one per bank/BS.

Can't say can recall having seen ISA T&Cs stating that you can only have one ISA with that bank/BS. Not sure why they would...

zoebel

rb10 wrote: »

That's only if you withdraw after exactly one year.

Withdraw after 6 months, and you get nothing.

Withdraw after 3 months, and you may get less back than you put in (depending on the T&Cs of the ISA).



Can't say can recall having seen ISA T&Cs stating that you can only have one ISA with that bank/BS. Not sure why they would...

I assume they would be happy for you to have as many products as they can get out of you. From what I know about banks, they like to sell products.

With regard to these penalties, from what you say they seem to be heavily skewed towards withdrawls in the first year, after that they seem to be negligible. :T:T

Consumerist

zoebel wrote: »

At the time of writing the best rate on an instant access ISA is around 2% but the best rate on a five year fixed rate ISA is just over 3%, but with a withdrawal penalty of 180 days loss of interest. However there is no limit to the number of five year fixed rate ISAs you can open, subject to the total annual subscription. Am I being naive then to suggestion that you can gain an extra percentage whilst still effectively having "instant access" by just having several fixed rate ISA's with small amounts in them?

There is no limit to the number of five year fixed rate ISAs you can open but you can add new money to only one cash ISA in any tax year. If you open more than one cash ISA, the others must be funded by transfers - in which case there will be no annual subscription limit to consider for these.

boobbby

I have in the past had multiple ISA both fixed and instant with lots of providers. As each has matured I have been transferring them into my Lloyds FR ISA which still pays 3.7%...

Consumerist

boobbby wrote: »

I have in the past had multiple ISA both fixed and instant with lots of providers. As each has matured I have been transferring them into my Lloyds FR ISA which still pays 3.7%..

But, under the ISA rules, you can only contribute new money to one cash ISA in any tax year. Any others must be funded by transfers.

boobbby

Consumerist wrote: »

But, under the ISA rules, you can only contribute new money to one cash ISA in any tax year. Any others must be funded by transfers.

Correct!! but I am not talking about new money only transfers. Some are partial transfers and other full transfers.

Consumerist

Ok. I was only commenting on the post by zoebel, who said :-

However there is no limit to the number of five year fixed rate ISAs you can open, subject to the total annual subscription.

but there are no subscription limits to consider when transferring ISAs.

ColdIron

Consumerist wrote: »

But, under the ISA rules, you can only contribute new money to one cash ISA in any tax year. Any others must be funded by transfers.

Technically this is not quite true. You can subscribe to one ISA and pay in new money (but less than the annual allowance). If you then subscribe to a second ISA and make a full transfer of the first you can pay in the remainder of you annual allowance