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Zopa Smart ISA - current highest 2-5 year fixed rate ISA
refluxer
Posts: 3,078 Forumite
Does anyone else have one of these ? They don't seem to get mentioned on here that often - I guess that's because they've only fairly recently re-introduced them, they don't currently accept transfer-in and also because they're app-only, which may put off some.
With fixed rates currently sliding and some ISA providers withdrawing their longer-term fixes completely (Close Brothers, Secure Trust and Kent Reliance withdrew all-but their 1 year fixes yesterday), I thought I'd make use of my 2023-24 allowance and lock in a top rate for a decent amount of time. Zopa's 3 year fix at 5.61% seemed to be the sweet-spot for me and it fills a gap in my savings ladder. Zopa pay interest monthly into the account so, if my calculations are correct, 3 years at 5.61% AER gives an average return of 5.93% PA which is equivalent to 7.41% for anyone who would otherwise pay 20% tax on their savings interest outside of an ISA.
One benefit of using Zopa is that they allow you to spread your allowance over different ISA 'pots' which would allow you to open up fixed rates of different durations, BUT - the big downside to this though, as far as I can see, is that all the different pots are treated as one ISA (with one reference number) and partial transfers out from a Zopa Smart ISA are not allowed so if, for example, you opened a 2 and 3 year fix, you would have to keep the 2 year fix with Zopa once it matured as attempting to transfer it out at that stage would close the whole thing and that would essentially force the early closure of the 3 year fix which would then be subject to a penalty. That's my take on the T&Cs anyway - happy to be corrected if anyone knows otherwise.
They're also not currently on the list of providers who use the BACs ISA transfer service, which could make things a bit more awkward at maturity. While their current batch of ISAs are too new for feedback around this, I gather Zopa used to offer ISAs years ago - does anyone have experience of transferring out ?
Those limitation aside, they're topping the 2, 3, 4 and 5-year fixed rate ISA tables at the moment and have a fairly generous 30 day funding window so I will probably do my usual trick of holding off funding it for a short while and watching what happens to fixed rates from other providers.
With fixed rates currently sliding and some ISA providers withdrawing their longer-term fixes completely (Close Brothers, Secure Trust and Kent Reliance withdrew all-but their 1 year fixes yesterday), I thought I'd make use of my 2023-24 allowance and lock in a top rate for a decent amount of time. Zopa's 3 year fix at 5.61% seemed to be the sweet-spot for me and it fills a gap in my savings ladder. Zopa pay interest monthly into the account so, if my calculations are correct, 3 years at 5.61% AER gives an average return of 5.93% PA which is equivalent to 7.41% for anyone who would otherwise pay 20% tax on their savings interest outside of an ISA.
One benefit of using Zopa is that they allow you to spread your allowance over different ISA 'pots' which would allow you to open up fixed rates of different durations, BUT - the big downside to this though, as far as I can see, is that all the different pots are treated as one ISA (with one reference number) and partial transfers out from a Zopa Smart ISA are not allowed so if, for example, you opened a 2 and 3 year fix, you would have to keep the 2 year fix with Zopa once it matured as attempting to transfer it out at that stage would close the whole thing and that would essentially force the early closure of the 3 year fix which would then be subject to a penalty. That's my take on the T&Cs anyway - happy to be corrected if anyone knows otherwise.
They're also not currently on the list of providers who use the BACs ISA transfer service, which could make things a bit more awkward at maturity. While their current batch of ISAs are too new for feedback around this, I gather Zopa used to offer ISAs years ago - does anyone have experience of transferring out ?
Those limitation aside, they're topping the 2, 3, 4 and 5-year fixed rate ISA tables at the moment and have a fairly generous 30 day funding window so I will probably do my usual trick of holding off funding it for a short while and watching what happens to fixed rates from other providers.
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