1, 2, 3 or 5 year fixed rate Cash ISA - What to go for

24

Comments

  • refluxer said:
    SickGroove said:
    One final question, do you know if you can split maturity options with Shawbrook? IE fixing say 20K into a new one year fix with them, but letting the remaining £60K go onto their easy access cash ISA account, thus splitting the other 3 lots of 20K (for example) once the current ISA matures..
    I'm afraid I don't know the answer to that one - my current fixed rate Shawbrook ISA is the first of this type that I've held with them, so I don't know what the maturity options are.

    One thing to note is that the interest rate of the 'matured funds' ISA is likely to be very low, so you ideally don't want funds hanging around in there for too long. If you thought there was a chance that this might happen, then requesting the balance of the matured fixed rate ISA is transferred to their Easy Access ISA would be an alternative option and likely to ensure you get a better rate. You'd just need to read the T&Cs of their Easy Access ISA to ensure it would meet your needs (in terms of partial transfers out etc). As it's a fairly straight-forward easy access ISA then it should do, but you'd need to check.
    So, I bizarrely received 4 separate maturity emails at the exact same time yesterday from Shawbrook, typically on the day their rates were slashed so their current rates are all I've got to choose from... Gutted!

    So I'm now thinking of just splitting the maturing £80K into 20K or £40K chunks & giving maturity instructions to Shawbrook to go onto their Easy Access Cash ISA - Issue 25 as it doesn't actually state what will happen to the maturing funds if you just do nothing... Last thing I want is for the funds to end up in my nominated account as I'll obviously lose the tax wrapper...

    Only thing is the Shawbrook Easy Access Cash ISA - Issue 25 doesn't
    mention about transferring out to other ISA providers... Just states all withdrawals will need to go back into my nominated account & info below our is about transfers in, but nothing about transfers out...

    Transfers in from other Cash ISA or Stocks and Shares ISA providers are permitted.
    Requests to transter funds into an account from another ISA provider must be made at the same time as your initial account application. Simply provide the details of your existing ISAs during the application process and sign and return the ISA transfer form to Shawbrook Bank. Requests received after your initial account application may be refused.

    With a cash ISA you are always allowed to transfer to another provider. Fixed rate cash ISAs will typically charge a penalty fee if the transfer is within the fixed term, but easy access cash ISAs shouldn't charge any penalty fee (they are easy access).

    https://www.gov.uk/individual-savings-accounts/transferring-your-isa
    'Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it' - Albert Einstein.
  • With about 21k maturing soon on my ISA, I was thinking of applying for Shawbrook's 1 year fix at 5.83% on the morning they withdrew that issue.  With that being unavailable, I considered Santander's 1 yr at 5.60% plus £50 eVoucher (which itself makes up for the difference between 5.83% and 5.60%).

    However, with rates likely to plummet, I wonder if it was a blessing on me missing out on Shawbrook's offer, leading me to consider a 2 year fix - such as Nationwide's 5.60%?

    After some quick calcs and taking into account compounded interest, I'd make up the £50 shortfall for the first year in year two, and the rate needs to be at least 5.35% in year 2 - is this right?
  • refluxer
    refluxer Posts: 2,649 Forumite
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    edited 30 September 2023 at 4:40PM
    So, I bizarrely received 4 separate maturity emails at the exact same time yesterday from Shawbrook, typically on the day their rates were slashed so their current rates are all I've got to choose from... Gutted!
    Yes, I've received messages in duplicate from Shawbrook occasionally - presumably it's just a glitch at their end. 
    So I'm now thinking of just splitting the maturing £80K into 20K or £40K chunks & giving maturity instructions to Shawbrook to go onto their Easy Access Cash ISA - Issue 25 as it doesn't actually state what will happen to the maturing funds if you just do nothing... 
    Have a look in the 'Can I withdraw money ?' section in the Shawbrook fixed rate ISA summary box / T&Cs (they often refer to it as the 'KPI' document). Mine says the following so it's likely that your's does too (check though)...

    CAN I WITHDRAW MONEY?
    At maturity, you can either withdraw your funds, transfer them into a new Shawbrook account of your choice (subject to any specific account terms and conditions) or transfer part or all of your balance to an alternative ISA provider (if your account matures within the same tax year as your deposits were made, you will have to transfer out the whole balance for that specific tax year). If you do not let us know what you wish to do by the maturity date, your account will revert to a Cash ISA Matured Funds account and the variable interest rate will be confirmed to you in writing.

    TBH though, you might as well request that the balance is to be transferred to their Easy Access Cash ISA because it'll then at least earn a better rate of interest while you decide what to do.
    Only thing is the Shawbrook Easy Access Cash ISA - Issue 25 doesn't mention about transferring out to other ISA providers... Just states all withdrawals will need to go back into my nominated account & info below our is about transfers in, but nothing about transfers out.
    It is common for easy access cash ISAs to allow transfers in and out at any stage (much like cash deposits and withdrawals) but you're right - the T&Cs for their easy access ISA don't specifically mention transferring out so it could be worth confirming the account will work in the way you want it to via a phone call or secure message before you submit your maturity instructions, if you want to be sure.
  • SickGroove
    SickGroove Posts: 255 Forumite
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    edited 30 September 2023 at 9:14PM
    refluxer said:
    So, I bizarrely received 4 separate maturity emails at the exact same time yesterday from Shawbrook, typically on the day their rates were slashed so their current rates are all I've got to choose from... Gutted!
    Yes, I've received messages in duplicate from Shawbrook occasionally - presumably it's just a glitch at their end. 
    So I'm now thinking of just splitting the maturing £80K into 20K or £40K chunks & giving maturity instructions to Shawbrook to go onto their Easy Access Cash ISA - Issue 25 as it doesn't actually state what will happen to the maturing funds if you just do nothing... 
    Have a look in the 'Can I withdraw money ?' section in the Shawbrook fixed rate ISA summary box / T&Cs (they often refer to it as the 'KPI' document). Mine says the following so it's likely that your's does too (check though)...

    CAN I WITHDRAW MONEY?
    At maturity, you can either withdraw your funds, transfer them into a new Shawbrook account of your choice (subject to any specific account terms and conditions) or transfer part or all of your balance to an alternative ISA provider (if your account matures within the same tax year as your deposits were made, you will have to transfer out the whole balance for that specific tax year). If you do not let us know what you wish to do by the maturity date, your account will revert to a Cash ISA Matured Funds account and the variable interest rate will be confirmed to you in writing.

    TBH though, you might as well request that the balance is to be transferred to their Easy Access Cash ISA because it'll then at least earn a better rate of interest while you decide what to do.
    Only thing is the Shawbrook Easy Access Cash ISA - Issue 25 doesn't mention about transferring out to other ISA providers... Just states all withdrawals will need to go back into my nominated account & info below our is about transfers in, but nothing about transfers out.
    It is common for easy access cash ISAs to allow transfers in and out at any stage (much like cash deposits and withdrawals) but you're right - the T&Cs for their easy access ISA don't specifically mention transferring out so it could be worth confirming the account will work in the way you want it to via a phone call or secure message before you submit your maturity instructions, if you want to be sure.
    So I think I'd be OK selecting the maturity instructions to go into the Shawbrook Easy Access Cash ISA - Issue 25 as the Key Product Information states in the T&C here if I'm reading correctly...

    https://www.shawbrook.co.uk/media/5859/easy-access-cash-isa-25-7.pdf

    So, once funds have matured & are sitting in this account, if I split the 80K as previously stated & get the new providers to contact Shawbrook to transfer the funds, can I just leave the odd amount (will be about £1100) to sit in this account?

    All the funds from the Shawbrook Cash ISA are pre October 2022, I took out a new 1 year fixed rate Cash ISA with Charter on April 6 2023 & funded it with the full 20K on that day so obviously when my Shawbrook Cash ISA matures next month, all those Shawbrook funds can be split however I like, as those funds are pre this current tax year.

    Thanks for your help/advice so far btw
  • Albermarle
    Albermarle Posts: 21,961 Forumite
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    Only thing is the Shawbrook Easy Access Cash ISA - Issue 25 doesn't
    mention about transferring out to other ISA providers...

    Probably simply because they do want to encourage you to transfer out by bringing it to your attention.

  • VNX
    VNX Posts: 258 Forumite
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    howryoo said:
    With about 21k maturing soon on my ISA, I was thinking of applying for Shawbrook's 1 year fix at 5.83% on the morning they withdrew that issue.  With that being unavailable, I considered Santander's 1 yr at 5.60% plus £50 eVoucher (which itself makes up for the difference between 5.83% and 5.60%).

    However, with rates likely to plummet, I wonder if it was a blessing on me missing out on Shawbrook's offer, leading me to consider a 2 year fix - such as Nationwide's 5.60%?

    After some quick calcs and taking into account compounded interest, I'd make up the £50 shortfall for the first year in year two, and the rate needs to be at least 5.35% in year 2 - is this right?
    Rates likely to plummet?
  • howryoo
    howryoo Posts: 220 Forumite
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    VNX said:
    howryoo said:
    With about 21k maturing soon on my ISA, I was thinking of applying for Shawbrook's 1 year fix at 5.83% on the morning they withdrew that issue.  With that being unavailable, I considered Santander's 1 yr at 5.60% plus £50 eVoucher (which itself makes up for the difference between 5.83% and 5.60%).

    However, with rates likely to plummet, I wonder if it was a blessing on me missing out on Shawbrook's offer, leading me to consider a 2 year fix - such as Nationwide's 5.60%?

    After some quick calcs and taking into account compounded interest, I'd make up the £50 shortfall for the first year in year two, and the rate needs to be at least 5.35% in year 2 - is this right?
    Rates likely to plummet?

    Sorry - plummet is probably the wrong word and sounds exaggerated.

    Was looking Shawbrook's rates which saw a drop in their ISA rates.  Obviously, that's only an indication of where rates might be going.



  • VNX
    VNX Posts: 258 Forumite
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    edited 1 October 2023 at 8:32PM
    As we all say god knows what the future holds but I can’t see much if any increases in bonds from here (don’t quote this in a years time)
  • masonic
    masonic Posts: 23,211 Forumite
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    Worth remembering that in a more stable interest rate environment, competition can drive fixed rates well above the BoE base rate. Pre-2008 this was not unusual. Whether rates fall to below historical averages again remains to be seen, but I wouldn't be surprised if the base rate remains close to 5% in the medium term.
  • SickGroove
    SickGroove Posts: 255 Forumite
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    So what are we all thinking re fixes...1, 2 or 3 years?

    Since Shawbrook cut their rates on the day my maturity instructions were received (at their new lower rate...grrrrrrr!) I think I'm just going put my 80K into their EA Cash ISA at maturity...then split from there once it's showing. I believe I can't set up transfers to alt provider(s) yet as Shawbrook have said I'll get a new account number for their EA Cash ISA once matured, so I guess I'll need that to give to the alt provider(s)?

    I'm currently thinking of either roughly splitting it into 2 & 3 year fixes with 40K in each or 1, 2 & 3 year fixes with about 26K in each

    I've maxed out my workplace pension contribution & don't want to risk in S & S ISA as I'm risk averse.
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