Martin's list of Top 1yr fixed cash ISAs

SydSnott

Checking The list over the last few days I notice that the top rate is 3.7%.
I have an ISA with Gatehouse Bank and have been advised that their current offering is 3.8%
Whilst I was satisfied to invest with the assurance of the FSCS Guarantee, I would be interested to understand just why this product which exceeds the rates currently in Martin's list has been excluded.
Are they in some way "risky"?

As a result of Liz Truss's mischief, most of my other ISA rates are now looking decidedly "unwell", so a mid term review seems to be in order despite the threat of penalties.
Does the team think that this would be a bad time to invest "in excess of the FSCS limit" with one organisation, in view of this Government playing fast and lose with the currency?
Is the Banking system safe?
Are any likely to collapse due to the ineptitude of Truss & Co particularly unknowns like Gatehouse?

Something else that occurred to me: 
In the event that a Bank did collapse and The FSCS paid out against lost ISA investments, would the resultant sum still be under the protection of ISA status?

eskbanker

SydSnott said:

Checking The list over the last few days I notice that the top rate is 3.7%.
I have an ISA with Gatehouse Bank and have been advised that their current offering is 3.8%

https://gatehousebank.com/personal/savings/cash-isa says 3.7% for a one year fix, where are you seeing 3.8% and is it available to new customers?

SydSnott

eskbanker said:

https://gatehousebank.com/personal/savings/cash-isa says 3.7% for a one year fix, where are you seeing 3.8% and is it available to new customers?

Ratz! it had been 3.8% since yesterday and I just refreshed the page and it has changed to 3.7%!
No matter, I'm not mithered about 0.1%, remainder of my post stands!

eskbanker

Obviously nobody knows if any banks are likely to collapse but it's not exactly difficult to keep to the FSCS limit (unless holding way too much in cash deposit form) so I can't think of any reason why anyone would knowingly breach it at any time?

Interesting question about restoring ISA wrappers post-failure though, I can't find an answer from a quick search so await someone better informed!

isasmurf

SydSnott said:

Something else that occurred to me: 
In the event that a Bank did collapse and The FSCS paid out against lost ISA investments, would the resultant sum still be under the protection of ISA status?

Regardless of whether the FSCS pays out or not, where a bank has been declared as in default by the FSCS or FCA, the balance of the ISA at the time of the default plus accrued interest can be remade to another ISA without it counting towards your annual allowance within 180 days of the Bank defaulting. However, there is no obligation for the new ISA provider to accept such deposits.

SydSnott

isasmurf said:

SydSnott said:

Something else that occurred to me: 
In the event that a Bank did collapse and The FSCS paid out against lost ISA investments, would the resultant sum still be under the protection of ISA status?

Regardless of whether the FSCS pays out or not, where a bank has been declared as in default by the FSCS or FCA, the balance of the ISA at the time of the default plus accrued interest can be remade to another ISA without it counting towards your annual allowance within 180 days of the Bank defaulting. However, there is no obligation for the new ISA provider to accept such deposits.

       So, the answer is "yes" then?

eskbanker said:
 it's not exactly difficult to keep to the FSCS limit (unless holding way too much in cash deposit form) so I can't think of any reason why anyone would knowingly breach it at any time?

I find attempting to keep ISAs tidy is a bit like herding cats and when attempting to get the very best returns, one does find that there is a dearth of decent offerings, hence the need to exceed FSCS cover!

masonic

SydSnott said:

isasmurf said:

SydSnott said:

Something else that occurred to me: 
In the event that a Bank did collapse and The FSCS paid out against lost ISA investments, would the resultant sum still be under the protection of ISA status?

Regardless of whether the FSCS pays out or not, where a bank has been declared as in default by the FSCS or FCA, the balance of the ISA at the time of the default plus accrued interest can be remade to another ISA without it counting towards your annual allowance within 180 days of the Bank defaulting. However, there is no obligation for the new ISA provider to accept such deposits.

       So, the answer is "yes" then?

Better than yes in some respects, as you can do as you wish with the money before putting it back into an ISA before the deadline. However, any interest generated on it before being put into a new ISA is taxable.

eskbanker

SydSnott said:

eskbanker said:
 it's not exactly difficult to keep to the FSCS limit (unless holding way too much in cash deposit form) so I can't think of any reason why anyone would knowingly breach it at any time?

I find attempting to keep ISAs tidy is a bit like herding cats and when attempting to get the very best returns, one does find that there is a dearth of decent offerings, hence the need to exceed FSCS cover!

Sounds like you're holding way too much in cash deposit form then!

If chasing the very best returns means that you have more than £85K with one institution, that extra 0.1% (or whatever) that you earn on the excess brings with it additional risk, so you need to make a decision as to whether it's really worth it for you....