Open isa or wait another month?

karie

Apologies for the crystal ball type question. However do people feel that 1yr fixed rates are as high as they’ll go for a bit (just over 3%) or still lots of headroom?

And would you fix for two years at 3.3% or take 1 year at 3.05% with the view rates will be higher in 12 months time? 

savit4l8er

I expect them to go higher and reading  other comments on here, so do many others. That is why one year fixes appear to be more popular from what I can see.  Having said that, it's personal choice and what suits you. 

I do find the penalty imposed on some of the 2 year fixes disproportionate to the nominal extra amount on offer but if the right one came along, I would be OK.  Even if rates don't go higher, it's always possible they will be similar after a year so take that into account. 

kora_2

Been thinking the same fix at 3.05% or wait a little longer.  Think I'm going to hold off.

karie

Thank you both. I’ll keep reading but think I might fix for a year soon and then re-fix after for longer…

Albermarle

savit4l8er said:

I expect them to go higher and reading  other comments on here, so do many others. That is why one year fixes appear to be more popular from what I can see.  Having said that, it's personal choice and what suits you. 

I do find the penalty imposed on some of the 2 year fixes disproportionate to the nominal extra amount on offer but if the right one came along, I would be OK.  Even if rates don't go higher, it's always possible they will be similar after a year so take that into account. 

If you mean withdrawal penalty, this really only applies to Cash ISA's ( with lower rates than non ISA savings accounts)
With the large majority of  non ISA fixed rate savings accounts, early withdrawal is not allowed at all.

savit4l8er

Albermarle said:

savit4l8er said:

I expect them to go higher and reading  other comments on here, so do many others. That is why one year fixes appear to be more popular from what I can see.  Having said that, it's personal choice and what suits you. 

I do find the penalty imposed on some of the 2 year fixes disproportionate to the nominal extra amount on offer but if the right one came along, I would be OK.  Even if rates don't go higher, it's always possible they will be similar after a year so take that into account. 

If you mean withdrawal penalty, this really only applies to Cash ISA's ( with lower rates than non ISA savings accounts)
With the large majority of  non ISA fixed rate savings accounts, early withdrawal is not allowed at all.

I was referring to the withdrawal penalties in line with the op's question, rates / terms quoted and the fact it is within the lSA and tax free section. I'm not sure any further explanation was necessary but thank you for highlighting what some might consider a benefit for an ISA over a non ISA. 
It's something I will keep in mind.

Returning to the original question, going by the speculation today for rates, holding off in a good paying account with access may be worthwhile before committing to a fix. 

karie

Agree @savit4l8er - so volatile at the moment it’s impossible to choose a good time to make a decision!

Oasis1

Worth the wait... Newcastle Building Society 1 year fixed rate cash ISA 3.6% Issue 61. 2 year fixed 4.1%

https://www.moneysavingexpert.com/savings/best-cash-isa/

karie

Wow definitely! Thank you @Oasis1

masonic

karie said:

Wow definitely! Thank you @Oasis1

Hold for another month and you'll likely see a simlar magnitude improvement. And so it will continue until the base rate catches up to forward predictions.

savit4l8er

The BR predictions for the year end are typically around 4%.  At the current 2.25, we are seeing fixed rate ISA' at anything from 3-4% plus just now.  These figures are anticipating the rises and attempting to attract funds in advance.  Further BR rises are expected next year so on that basis, there is some way to go but the spread between the BR and the fixed rates on offer may decrease and once the predictions are reached / downward who knows?  I might say I am hedging.  Funds in a fix at the lower end of what is on offer now but still OK with a year left. Will move on increases if viable.  Some maturing and some in an easy access ready.  The maturing batch are the ones which fall into your dilemma.  On top of that, you have fscs limits to take into account so not all can go to your "best" choice if it exceeds the limit and it bothers you.   Maybe it depends on your situation and no "one size" fits all?  A spread over coming months may be worth considering and just average your return.