5 year fixed rate ISA should I withdraw and open another at higher rate

littlegran

I have a 5-year fixed rate ISA paying 2.1% that matures 15/12/2023  Would I be better of withdrawing it at a loss of 365 days interest and putting it in a 3-year fixed rate ISA paying 4,75%.  

eskbanker

Depends over what period you wish to measure it but you'd recover the penalty charge in a few months and be ahead thereafter.

bristolleedsfan

littlegran said:

I have a 5-year fixed rate ISA paying 2.1% that matures 15/12/2023  Would I be better of withdrawing it at a loss of 365 days interest and putting it in a 3-year fixed rate ISA paying 4,75%.  

Best 3 year fixed rate ISA that I can see 4.40%, who is offering 4.75%?

refluxer

I have a 5 year fixed rate ISA paying 2.25% that matures in 5 months time (3rd April 2023) and I've just worked out that II'll be a few hundred pounds worse off on 3rd April if I was pay the 365 day penalty and transfer it today to the highest-paying Cash ISA currently available (4.40%)

You might be better off though as yours is on a lower rate and has a lot longer to run, but do your calculations carefully. The rate you're moving to is obviously critical in working out whether you'll be better off so make sure you get that right. As bristolleedsfan mentioned, the highest paying fixed rate cash ISA currently available is 4.40% for 3 years. This simple interest calculator might help with any calculations.

bristolleedsfan

refluxer said:

I have a 5 year fixed rate ISA paying 2.25% that matures in 5 months time (3rd April 2023) 

Unlucky being as i took out 5 year ISA which I transferred other ISAs to on 23 April 2018  - 2.79% (AER 2.82%) 

refluxer

bristolleedsfan said:

refluxer said:

I have a 5 year fixed rate ISA paying 2.25% that matures in 5 months time (3rd April 2023) 

Unlucky being as i took out 5 year ISA which I transferred other ISAs to on 23 April 2018  - 2.79% (AER 2.82%) 

I guess it's possible the rates went up near the start of the new tax year ? That was with the Halifax - back in the days when I used to stick to the 'big names' and didn't fully appreciate the full range of options out there, although I'm fairly sure I would have been checking the MSE top ISA tables, even then. It was also a hurried, last minute attempt to use up my 2017-2018 allowance !

I was actually pretty pleased with it - especially during the pandemic when rates were heading to zero. Since then, it's only in the last 5 months or so that it's fallen behind the best available

bristolleedsfan

refluxer said:

bristolleedsfan said:

refluxer said:

I have a 5 year fixed rate ISA paying 2.25% that matures in 5 months time (3rd April 2023) 

Unlucky being as i took out 5 year ISA which I transferred other ISAs to on 23 April 2018  - 2.79% (AER 2.82%) 

I guess it's possible the rates went up near the start of the new tax year ? That was with the Halifax - back in the days when I used to stick to the 'big names' and didn't fully appreciate the full range of options out there, although I'm fairly sure I would have been checking the MSE top ISA tables, even then. It was also a hurried, last minute attempt to use up my 2017-2018 allowance !

5 Year ISA I spoke of is with UBLUK, I think at the time that rate was hardly any difference ( if any) with non ISA 5 year fixed rate

ShonaBM

Which bank offers 5 year Isa’s 

Dazed_and_C0nfused

ShonaBM said:

Which bank offers 5 year Isa’s 

At least 5 providers do according to Savings Champion website.

Maybe not all "banks" but interest rates on those 5 range from just under 4% to 4.1%

Albermarle

Best 5 Year Fixed Rate ISAs | Rates Up To 4.15% (moneyfactscompare.co.uk)