Virgin Cash ISA V The Rest

MissHap

Nice one!
Still hanging on to see if anyone offers a better rate before deadline day, I'm still undecided whether to go for a 1 year deal or longer, its money that wont be touched so at the moment its either Virgin at 5.25% 1 year or UBL at 4.16% over 5 years.
Question.........................If I go the UBL route, can I put in again year on year at the same interest rate??

refluxer

MissHap said:

Question.........................If I go the UBL route, can I put in again year on year at the same interest rate??

You'd need to read the T&C's, but most ISA providers have a limited funding window for paying into a fixed rate cash ISA (usually up to 1 month max), in which case that wouldn't be possible, although you might be able to pay in your 2024/25 allowance if the funding window takes you into the next tax year.

Two exceptions to this that I'm aware of are the fixed rate cash ISAs offered by Barclays and Shawbrook, where continued subscriptions are allowed throughout the duration of the fix. 

MissHap

Thanks for that refluxer, thats good to know.
Question..................so if you take out a fixed rate cash ISA with Barclays or Shawbrook and compound your interest and add each years ISA allowance to it, meaning you invest £100k over the 5 years, will you get the same interest rate in year 5 as you got in year 1??

Descrabled

Neither Barclays nor Shawbrook have a 5 year ISA. Barclays did once have a 3 year ISA and you could add to it at the then excellent fixed interest rate. Shawbrook presently offer a 1 or 2 year fixed rate, whilst Barclays only offer an 18 month or 1 year ISA

MissHap

Soooooooooooooo, a 5 year fixed rate cash ISA with UBL pays out your £20k plus the year on year compounded interest??
Presumably if a better rate is available elsewhere next year, you can transfer out but with penalties??

refluxer

Yes, you can transfer out of a 5 year cash ISA before the maturity date but the penalty for a 5 year term is usually very high (365 days) so you'd need a substantially higher rate in order to make that worthwhile and doing that within the first year would see you getting back less than you put in. 

Note that UBL only appears to allow interest to compound if you select it to be added at maturity - if you select any other interest option than it has to be paid away, meaning it won't compound within the ISA.

Compounding gives you an average return of 4.52% PA over the 5 years.


 

edfellows

I’ve just tried setting up a 2 year fixed rate ISA with UBL. They open two accounts for you. You have to transfer into the account they call your funding account. Was trying to do the transfer from my account to UBL funding acoount and could not get bank to accept the name and accounts matching. Called UBL for some support. The person spoke with was exceptionally rude and was no help whatsoever. Have never experienced being treated this  badly in the Uk by any service. Given this is an example of their customer service….. going to give them a miss and not use them

MissHap

Thanks guy, I'll pass on this company then!