M&S ISA

donsaini

nobody seems to recommend M&S mini cash isa, currently 5.25%, guaranteed .25% above base.

just deposited some money for this year, suddenly worried am i missing something

isasmurf

Nobody recommends it probably because it is closed to new investors, but yes if you already have one then there isn't really that much around to tempt you from it.

georgan

Hi Donsaini,

just a small observation that M&S's ISA stands at 5% and not at 5.25%, indeed .25% above BoE base rate which is 4.75% for the moment.

Now depending on the size of your ISA in terms of capital, you need to balance out whether you are still better off with this level of interest rate or with the rate of another provider if you moved across, accounting of course for all costs involved, e.g. moving your capital from M&S (days of no interest earned) plus potential costs to transfer from the new provider in the future.

Aris

derrick

I have just spoken to M&S Money as I have a cash ISA with them, and whilst the ISA is not open to new investors,and the rate is guaranteed for this tax year not to be less than.25% above base rate, it is currently at 5.25%, i.e .5% above base rate, and investors will be notified prior to any rate change.

isasmurf

I've noticed this is a common misunderstanding. An interest rate guarantee does not mean that is what the interest rate is at the moment. It simply means that the interest rate will not go below what the guaranteed rate is, but the bank can offer a higher interest rate than the guarantee if they want to.

The M&S ISA is a good case in point - guaranteed not to be less than 0.25% above BoE base rate (which is 5% at the moment), but the interest rate is currently 5.25%, so beating their own guarantee.

derrick

isasmurf wrote:

BoE base rate (which is 5% at the moment),

Unless they have just changed it the BoE rate is 4.75%

jimclark1967

derrick wrote:

Unless they have just changed it the BoE rate is 4.75%

That is very true. However what Isasmurf actually said was:

isasmurf wrote:

0.25% above BoE base rate (which is 5% at the moment)

which is also very true, which only goes to show that this is a very truthful community

derrick

jimclark1967 wrote:

That is very true. However what Isasmurf actually said was:


which is also very true, which only goes to show that this is a very truthful community

All down to interpretation and grammar

david78

They have term in their T&Cs which says they will only change the rate when the BoE rate changes. I think when the rate drops M&S will probably drop their rate a bit more. If the rate goes up, their rate won't go up as much. By the end of the year there will only be 0.25% difference.

jimclark1967

derrick wrote:

All down to interpretation and grammar

Indeed it is. Maybe it should have been written:

0.25% above BOE base rate (which makes 5% at the moment)

:beer:

jimclark1967

david78 wrote:

They have term in their T&Cs which says they will only change the rate when the BoE rate changes. I think when the rate drops M&S will probably drop their rate a bit more. If the rate goes up, their rate won't go up as much. By the end of the year there will only be 0.25% difference.

Sadly it's never a good thing when an account is closed to new customers - the rates only go one way :mad: