Fixed rate ISA's
in ISAs & tax-free savings
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I know that Martin is telling us to ditch the ISA but i have some good advice for those who do have them . I have just saved myself hundreds of pounds by switching my ISA's to a better rate. I had several fixed rate ISA's that were not due to mature for at least another year. They were getting only 0.35% or 0.4 %. I asked my Isa's to be changed to 2% fixed for 3 years. Yes there was a penalty to pay for doing so ( 90 days interest for one and 180 days the other ) but the increase in rate more than offset this. I didn't know this was possible to do but it will gain me hundreds of pounds extra.
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If you are repeatedly locking money up for long periods do you actually need it in cash? If as you say the additional interest will be hundreds then maybe some of that cash would be better off invested so that it has a chance to keep pace with inflation. Otherwise this year your money will effectively lose value by 8% (10% inflation minus 2%)
Depends who you mean by 'they' but the BoE's 2.5% base rate prediction is actually for mid 2023 rather than end 2022: