ISA maturing - does this sound like a reasonable idea?

gele

I have £40k maturing in an Isa with the Coventry. Rates they're offering are as per the website for 1,2 and 3 yr rates. Theres also a 5 yr not on website when I looked. The 5 yr is 4.05%. I am thinking of splitting this money in half and putting 20k in the 5 year and 20k in the one year [3.65%] as these 2 options seem the most competitive of the choices if I stick with Coventry. I don't have to of course but for the sake of a few pounds I like the simplicity of it. Does this seem like a reasonable idea? I was thinking there might be a chance of a slightly better rate at the end of the 1 yr but less confident of the same thing after 5 yrs. Thanks

Albermarle

The 5 years rate does not look very competitive.
Personally I would never fix for that long as a lot can happen in 5 years, but that is just my personal opinion.

Best 5 Year ISA Rates | Compare & Open Today | moneyfacts.co.uk

( ignore the Top one as you have to live locally I think )

gele

I understand. My thinking is I will be a couple of years away from my state pension by then and really hope I wont be working. Was thinking that would replace my wage for one year and the other 20k from the one year would be reinvested in 2023 to replace wages for a 2nd year if I retire early. Of course no-one knows what might happen between now and then which is another reason I though just split it and not tie it all up for too long. 

Ocelot

I've recently transferred 2 cash ISAs from Coventry to other institutions. Would have been happy to stay with Coventry, but rates are too crap.

cricidmuslibale

Ocelot said:

I've recently transferred 2 cash ISAs from Coventry to other institutions. Would have been happy to stay with Coventry, but rates are too crap.

I very much agree with the 2nd sentence above! Coventry's currently available interest rates for their fixed rate cash ISAs have decreased considerably, relatively speaking, from just a few weeks ago when they were (briefly for a few days only) offering 4.35% for a 2 year and 1 month fixed ISA to 30 November 2024, and 4.40% for a 3 year and 1 month fixed ISA to 30 November 2025.

Assuming it is still available, Yorkshire Building Society are currently offering a similar 3 year and just over 1 month fixed ISA paying 4.40% to 31 December 2025; this may a suitable alternative for some savers, including those who would definitely have stayed with Coventry BS if only they were still offering their previous, considerably more generous interest rates!

gele

Yes I had looked at that as I opened a 2.5% rainy day saver with them which I still have a few quid in. I didn't know whether the reduction down to 4.05% would be worth it for an extra 2 yrs when weve no idea where rates will be by then. Could be back at 1% if we are now at the begining of a long term recession. No-one knows the answer to that unfortunately. Lets be honest no-one knows where therell be in 3 weeks at the moment never mind 3 yrs