Skipton - Cash Saver vs Cash Tracker

se2020

Can somebody explain the difference between the Skipton 
Cash ISA Saver 2.7%
Cash ISA Tracker 2.75%

The tracker follows BOE at -1.25%
The saver is also variable interest though and, according to the t&c's has a long list of reasons why they can change it.

If they can change the interest rate on either then any reason i should not just go for the 2.75%?

ForumUser7

As the base rate is now 4.25%, their cash ISA tracker will go to 3% from maximum 14 days after 23rd March.

I know this isn’t what you were asking, but this is a good reason to pick the tracker IMO.

N.B. It only tracks for 2 years

se2020

ForumUser7 said:

As the base rate is now 4.25%, their cash ISA tracker will go to 3% from maximum 14 days after 23rd March.

I know this isn’t what you were asking, but this is a good reason to pick the tracker IMO.

N.B. It only tracks for 2 years

Thanks!

It's part of a house deposit that I am looking to put into it.
£16000 (the other £4k into my existing lisa)

I'm thinking that the interest rate change is not a problem as, if rates drop, the mortgage I get will be cheaper anyway.

If the rate is uncompetitive after 2 years I presume I can transfer the funds to a different isa or just withdraw and put them into a savings account etc?

MDMD

Why not just open both? Then just keep the money in the one that pays the most at any point in time.

There may be other options elsewhere too.

ForumUser7

se2020 said:

ForumUser7 said:

As the base rate is now 4.25%, their cash ISA tracker will go to 3% from maximum 14 days after 23rd March.

I know this isn’t what you were asking, but this is a good reason to pick the tracker IMO.

N.B. It only tracks for 2 years

Thanks!

It's part of a house deposit that I am looking to put into it.
£16000 (the other £4k into my existing lisa)

I'm thinking that the interest rate change is not a problem as, if rates drop, the mortgage I get will be cheaper anyway.

If the rate is uncompetitive after 2 years I presume I can transfer the funds to a different isa or just withdraw and put them into a savings account etc?

No worries

Yes, that’s right:

After 2 years, it matures into a new easy access ISA - N.B. The tracker version is also easy access.

Therefore throughout the 2 year period, and after it has matured, you are able to withdraw funds and/or transfer the ISA. To preserve the ISA wrapper, a transfer would be the best way to go - unless you needed to access the funds due to an emergency. Fortunately, as this account is a flexible ISA you could deposit the funds back in, subject to the rules. I’ve attached some of the wording from their website, to help explain in more depth in case this is helpful:

• “This account is a flexible ISA, so you can withdraw money and put it back without affecting your ISA allowance, as long as it’s done in the same tax year and the account is still open.
• At the end of the 24 month term, which is also known as ‘maturity’, unless you tell us otherwise, your account will automatically transfer into a new easy access Cash ISA, which has a variable rate of interest and doesn’t track the Bank of England Base Rate. We’ll contact you before maturity and you can find out more about the maturity process in condition 8.0 of the further terms and conditions.”

“Can I transfer my Skipton Cash ISA to another provider?

We’d love you to stay with us and if there’s anything you’re not happy about we’re here to help. However, you can transfer your Skipton Cash ISA to another ISA provider, subject to the terms of your account.

If you wish to transfer your account to another ISA provider, please contact your new provider. On receipt of a transfer instruction from them, we’ll transfer your account within a time stipulated by you or five working days, whichever is later, and your savings will remain tax-free (providing the transfer is in accordance with ISA Regulations).

If you transfer your current tax year’s savings from a Cash ISA to a different type of ISA, the money transferred will be treated as if you had put that money directly in that ISA. For example, if you’d saved £4,000 in a Cash ISA and then transferred to a Stocks and Shares ISA, you could then deposit the remaining £16,000 of your allowance as you like into a Cash ISA, an Innovative Finance ISA, a Lifetime ISA (if eligible, subject to the maximum annual subscription limits) and/or the Stocks and Shares ISA.

You can transfer previous years’ Cash ISAs into a Stocks and Shares ISA, an Innovative Finance ISA and/or another Cash ISA without affecting your annual ISA allowance (subject to the specific account terms and conditions of the new ISA).

You can also transfer previous tax years’ savings from a Cash ISA to a Lifetime ISA. The value transferred to the Lifetime ISA will count towards the annual £4,000 Lifetime ISA allowance, but not the overall ISA subscription limit for the tax year.”

Bridlington1

If you're looking at cash ISAs for house deposit savings you are likely better off opting for the YBS limited access ISA, which currently sits at 3.1% and will rise to 3.35% on 5th April. See:
https://www.ybs.co.uk/savings/product?id=YB851683W

aaj123

I really think now is when Flexible ISAs will really come into their own for many. They were introduced in 2016 but its only now that interest rates have come back to a level where their benefit really jumps out. In particular anyone who is higher or additional rate tax payer would greatly benefit from using these as their instant access account. The Skipton one has the icing on the cake due to its 24 month tracking guarantee which ensures it will also be near market leading all the time.