Virgin 2.5% ISA

sultan123

Would anyone recommend choosing the 1 year fixed rate ISA account? 

The rate seems decent at 2.5%

Planning to put 5k into it?

RG2015

sultan123 said:

Would anyone recommend choosing the 1 year fixed rate ISA account? 

The rate seems decent at 2.5%

Planning to put 5k into it?

1 year is 2.27% and 2 years is 2.62%.

Edit, now up to 2.40%

https://uk.virginmoney.com/savings/find/results/#online

silvermum

RG2015 said:

Edit, now up to 2.40%

https://uk.virginmoney.com/savings/find/results/#online

Noooooo!

Just opened one of these this morning at 2.25% ! 

Is there any way I could cancel and reapply for the higher rate one? Is there a 14-day cooling-off period clause I could utilise for example?

refluxer

silvermum said:

RG2015 said:

Edit, now up to 2.40%

https://uk.virginmoney.com/savings/find/results/#online

Noooooo!

Just opened one of these this morning at 2.25% ! 

Is there any way I could cancel and reapply for the higher rate one? Is there a 14-day cooling-off period clause I could utilise for example?

Have you funded it with new money yet or requested a transfer ? If not, then accounts are normally closed if you don't fund them within a certain time - check the T&C's.

It might be worth a call to Virgin to see if they can shift you onto the latest rate - some providers will actually do this automatically if the rate increases before the account is funded. If they aren't one of those providers or won't shift you across, then you could simply request that they close the account which will speed up the process.

At the rate these rates are increasing, even that higher Virgin rate will be beaten within a week or two.

silvermum

I transferred in an existing Virgin easy access ISA. No 'new' money added. Think I'll give them a call to see what they say!

Mr_K

It's a good rate at the moment but might be a rubbish one in 6 months time with interest rates going up every month.  Think I'd be wary about any fixed rate account atm.

RG2015

Mr_K said:

It's a good rate at the moment but might be a rubbish one in 6 months time with interest rates going up every month.  Think I'd be wary about any fixed rate account atm.

The problem is that when the banks suspect that rates will be coming down they will reduce their fixed rates.

silvermum

Mr_K said:

It's a good rate at the moment but might be a rubbish one in 6 months time with interest rates going up every month.  Think I'd be wary about any fixed rate account atm.

Generally I'd agree, but I opted for this on the basis that:

1) Withdrawal penalty was only 60 days (compared with 90 for most other fixed rates)
2) It was a limited amount already in an ISA which was languishing at 0.41% (yes, I know, I know, I'd neglected to deal with that!)
3) I have larger amount ISAs maturing at end August and in October which will hopefully catch higher rates.

masonic

I think 0.7% above easy access gives enough headroom for likely rises. Provided easy access doesn't overtake this rate in much less than 6 months, then nothing was lost. Of course the 2.5% version would have been even better.

jak22

At the moment instant access ISAs are still around 1.5% - it's non-ISA that are closer to 1.8% - so the gap is around 0.9% right now.

To be worse off fixing then not only would the instant access need to catch up to 2.4% after 6 months but to get ahead by that same 0.9% in 12 months to average out the same. Is it likely that instant access ISAs will be 3.3% in a year?

It's also possible to put only a certain amount into a fix and then after a couple of months take a further fix at a higher rate and so on - to cover if rates do go up more quickly.

It's worth waiting a couple of weeks after each BoE rise for any changes but to not consider fixing at all because rates are rising all the time might not be the best strategy.

silvermum

Just an update for anyone interested, and it might help others:

I (eventually - 50 mins on hold!) got through to Virgin who confirmed that it IS indeed possible to close a fixed rate ISA within the 14 day cooling off period and transfer it to a higher rate one without any penalty.