Nationwide 18 month Member Exclusive ISA maturing?

savit4l8er

silvermum said:

Can I check my thinking on this:

For a fairly large sum (over £40k) would it make sense to open both the 1 year and 2 year and divide it between the two?
If rates went a lot higher then I could 'upgrade' the rate for the 1 year 'pot' of money only (for a 90 day interest penalty).

Is this a sensible 'hedge' or is there a flaw in my thinking here?

Had the same idea and it could work but what I question is how long it will take before there is a rate sufficiently high enough to cover the deficit you have incurred already by not receiving the 4.5%.  On top of that, you have to cover the penalty as well. If it takes a year, you'll require 5% just to average the 4.5 you could have had in the first place before the penalty is even considerd. That doesn't account for future terms and whether the 4% portion will get a better return eventually from timing. But that's the gamble. Who would have thought a while back, you could be getting six times what you were getting. There will be further increases but will it be enough?  It's similar to saving with different institutions if your at the fscs limit and you don't want to go all in on one but your hand is forced in that case. 

howryoo

I must say, I never thought a rise in rates will give me so much headache!

@savit4l8er says, if you leave it too long to chase rates, rates need to be high enough to offset the deficit ...

silvermum

savit4l8er said:

silvermum said:

Can I check my thinking on this:

For a fairly large sum (over £40k) would it make sense to open both the 1 year and 2 year and divide it between the two?
If rates went a lot higher then I could 'upgrade' the rate for the 1 year 'pot' of money only (for a 90 day interest penalty).

Is this a sensible 'hedge' or is there a flaw in my thinking here?

Had the same idea and it could work but what I question is how long it will take before there is a rate sufficiently high enough to cover the deficit you have incurred already by not receiving the 4.5%.  On top of that, you have to cover the penalty as well. If it takes a year, you'll require 5% just to average the 4.5 you could have had in the first place before the penalty is even considerd. That doesn't account for future terms and whether the 4% portion will get a better return eventually from timing. But that's the gamble. Who would have thought a while back, you could be getting six times what you were getting. There will be further increases but will it be enough?  It's similar to saving with different institutions if your at the fscs limit and you don't want to go all in on one but your hand is forced in that case. 

Yes, oh for a crystal ball!

I did find myself googling and reading this statement from the BofE which suggests that in their ideal scenario/ targets inflation will peak this month, stay high for a few months and then begin to fall. They are aiming to get it back to around the 2% level in about two years!
https://www.bankofengland.co.uk/knowledgebank/will-inflation-in-the-uk-keep-rising

In this scenario we might have already reached the highest savings rates will get?

TojoRalph

@silvermum I had not read that statement from BOE, but it seems to be more optimistic with regards to getting interest rates down than some commentators.

Tomorrow is FISA maturity day for me and I think I will be going down the two year 4.5% route tonight. That should almost guarantee that those who opt for the one year 4.0% will ultimately have made the right decision. 😂

TojoRalph

Am I right in saying that if I let my monies from the 18 Month Fixed Rate deal mature and go into a Fixed Term ISA Maturity account, I will still retain the right to transfer to the Fixed Rate ISA for maturing funds? Or rather is that how the rules are now? If so, is there a time limit by which the money would need to be transferred to the Fixed Rate ISA? I am just wondering if there is scope to let maturing monies go into the Fixed Term ISA Maturity account, wait say 28 days, then transfer to the Fixed Rate ISA. Once in the Fixed Rate ISA I would have 14 Days to cancel, which would take me approx two weeks beyond the BOE Nov 3 meeting. Thanks.

refluxer

I've not read anything about a time limit but there's no guarantee the FRISAs won't be withdrawn while you're waiting. The rates could change (up or down) too.

silvermum

For those who opted into one of the FRISA maturity options, how long did it take for the new account to show with the full balance in Nationwide online banking?

Mine matured today and the Maturity account statement shows the interest paid, but has a zero balance. The new FRISA account isn't showing yet which suggests my £40k is floating around in the transfer process somewhere - a bit disconcerting!

refluxer

silvermum said:

For those who opted into one of the FRISA maturity options, how long did it take for the new account to show with the full balance in Nationwide online banking?

Mine matured today and the Maturity account statement shows the interest paid, but has a zero balance. The new FRISA account isn't showing yet which suggests my £40k is floating around in the transfer process somewhere - a bit disconcerting!

As it's an internal transfer, I wouldn't worry at all. It may even be written into the terms somewhere that the new account could take a day or so to show up in online banking.

changearound1

silvermum said:

For those who opted into one of the FRISA maturity options, how long did it take for the new account to show with the full balance in Nationwide online banking?

Mine matured today and the Maturity account statement shows the interest paid, but has a zero balance. The new FRISA account isn't showing yet which suggests my £40k is floating around in the transfer process somewhere - a bit disconcerting!

Mine took 2 days from maturity date to complete. It went through various stages along the way: being called Fixed Term ISA Maturity, interest removed to my current account as instructed, balance appearing as zero then finally being called FRISA/M with the correct balance.

Be patient, your situation sounds identical to mine last week.

hamski

My fixed rate isa is also not showing yet,says in faq that it can take up to 5working days to show. But I’ve queried it in the missing accounts page online just in case