Invest in current ISA or New Fixed Term ISA 13 March at 2:02AM in ISAs & tax-free savings 2 replies 107 views

sbtar

Hello everyone.

I have found myself in a fortunate position. With the end of the financial year in sight I have enough savings to either deposit into my current flexi rate ISA or take out a new Fixed term ISA. 
The conundrum is what will happen with interest rates after the next BOE announcement on 23rd March? Should I hold out a few weeks after the announcement and gauge what will happen with interest rates or just jump in and take a chance on a fixed term ISA?
I am also considering a Stocks and Shares ISA but these come with an element of risk.

If anyone has any advice I would appreciate it.

Frogletina

sbtar said:

Hello everyone.

I have found myself in a fortunate position. With the end of the financial year in sight I have enough savings to either deposit into my current flexi rate ISA or take out a new Fixed term ISA. 
The conundrum is what will happen with interest rates after the next BOE announcement on 23rd March? Should I hold out a few weeks after the announcement and gauge what will happen with interest rates or just jump in and take a chance on a fixed term ISA?
I am also considering a Stocks and Shares ISA but these come with an element of risk.

If anyone has any advice I would appreciate it.

Why not open a fixed rate Isa but not fund it until later. Some fixed rate Isas give you 30 days to deposit into them.

At one time I had about 5 Isas that I never funded. Better ones kept coming along, but it gave me options along the way and if interest rates started dropping I could fund the best one 

In the meantime you could put the money in your easy access Isa.

Albermarle

The conundrum is what will happen with interest rates after the next BOE announcement on 23rd March?

As discussed many times on this forum, long term fixed rates are only partly/indirectly affected by changes in the Bof E rate . This is because they look at the outlook for interest rates over the period of the fixed term, so if the current rate say moves 0.25% it may well have no effect on long term rates.

I am also considering a Stocks and Shares ISA but these come with an element of risk.

The risk is massively diluted the longer you leave the investments alone. 5 years is seen as a minimum, ideally more than 10 years. So it depends on when you might need the money. Also be aware that a S&S ISA is just the wrapper, its performance will depend on which investments you pick to go in it, as well as market movements.