Is the Post Office my best ISA option?

System

This discussion was created from comments split from: Cash ISAs: The Best Currently Available List.

typeractive

Hi all,

Like many others I'm shopping around to find an ISA that's right for me. Currently I'm looking for an ISA which I can get access to with ease, and without penalty, just in case I wish to utilise the savings for other activities. I want to be able to:

• Transfer in my existing ISA balance,
• Have access if required without a notice period,
• Not be penalised if I withdraw the money and then add back into it (though this isn't really essential).

I'm thinking the Post Office at 4.9% is possibly my 'best' option for a known brand.

Does anyone else have any thoughts?
Thanks  

refluxer

typeractive said:

Hi all,

Like many others I'm shopping around to find an ISA that's right for me. Currently I'm looking for an ISA which I can get access to with ease, and without penalty, just in case I wish to utilise the savings for other activities. I want to be able to:

• Transfer in my existing ISA balance,
• Have access if required without a notice period,
• Not be penalised if I withdraw the money and then add back into it (though this isn't really essential).

I'm thinking the Post Office at 4.9% is possibly my 'best' option for a known brand.

Does anyone else have any thoughts?
Thanks  

Your first two requirements are fairly standard for most easy access cash ISAs but to be able to withdraw money and replace it during the same tax year without it counting again towards your annual ISA allowance, you need to choose an ISA that's 'flexible' and the Post Office Online ISA isn't.

If you're comfortable with app-only banking, the highest paying easy access cash ISAs that meet all 3 of your requirements are Chip (5.10%) and Zopa (5.07%). Of the two, I would personally choose Zopa as I have a fixed rate ISA pot with them and haven't had any issues. The only downside to Zopa is that they don't allow partial transfers out.

If you're not happy with app-only banking, then I would go for Charter's easy access cash ISA at 5.03% - it's not flexible though, so you'd need to decide just how important that aspect is to you. 

If you're wanting to have this set up before the end of the tax year, then you'll need to be quick and bear in mind that registering with any bank can take a while if you fail online ID checks and have to post off any documents. As is the norm at this time of year, a number of ISA providers have already suspended new ISA applications and more will follow in the next few days, ahead of the 5th April deadline for using this year's allowance.

boingy

This is only my own personal view but I don't consider the Post Office to be the best option for any form of banking or finance! There are better ISAs out there but it's getting very late to get one in this tax year.

XzavierWalnut

I believe the 4.9% is only if you leave the money in for 1 year.

Easy Access

Issue 40

Annual interest rate without bonus	1.55% Tax Free/AER variable
Annual interest rate with bonus	4.90% Tax Free/AER variable (includes a fixed bonus of 3.35% gross)

eskbanker

XzavierWalnut said:

I believe the 4.9% is only if you leave the money in for 1 year.

Easy Access

Issue 40

Annual interest rate without bonus	1.55% Tax Free/AER variable
Annual interest rate with bonus	4.90% Tax Free/AER variable (includes a fixed bonus of 3.35% gross)

No, that's not what those terms are saying - they mean that the rate is boosted by an extra 3.35% for any and all interest paid for up to a year (pro rata if necessary), so, for example, if the account is closed or emptied after six months, interest of (roughly) 2.45% would be paid.

refluxer

XzavierWalnut said:

I believe the 4.9% is only if you leave the money in for 1 year.

Easy Access

Issue 40

Annual interest rate without bonus	1.55% Tax Free/AER variable
Annual interest rate with bonus	4.90% Tax Free/AER variable (includes a fixed bonus of 3.35% gross)

No, that's not right. It's an easy access account with a variable interest rate that includes a bonus rate of 3.35% and it's this bonus rate that lasts for 12 months.

Albermarle

typeractive said:

Hi all,

Like many others I'm shopping around to find an ISA that's right for me. Currently I'm looking for an ISA which I can get access to with ease, and without penalty, just in case I wish to utilise the savings for other activities. I want to be able to:

• Transfer in my existing ISA balance,
• Have access if required without a notice period,
• Not be penalised if I withdraw the money and then add back into it (though this isn't really essential).

I'm thinking the Post Office at 4.9% is possibly my 'best' option for a known brand.

Does anyone else have any thoughts?
Thanks  

Of all the cash ISA/savings providers, they probably have the most negative comments on this forum.
Poor service, antiquated IT and in fact they are only a front, and you are actually saving with the Bank of Ireland. Probably having a third party involved is part of the problem.

ShinyStarlight1

I’m so appalled by the way the Post Office treated its sub postmaster/mistresses that I won’t be depositing any money with them.

eskbanker

ShinyStarlight1 said:

I’m so appalled by the way the Post Office treated its sub postmaster/mistresses that I won’t be depositing any money with them.

You might feel that's a noble and well-intentioned gesture, but as above they only lend their brand name to accounts held and operated elsewhere, so you wouldn't be "depositing any money with them" as such anyway:

Online ISA is provided by OneFamily, savings in Post Office Cash ISAs are deposited with Bank of Ireland UK

https://www.postoffice.co.uk/savings-accounts/online-isa

boingy

Regardless of who runs the products and services behind the scenes the Post Office is now a tainted brand:

Post Office brand health plummets in wake of ITV drama (marketingweek.com)

I'm not sure they'll ever recover. 

And having experienced p*** poor service from Post Office insurance, Post Office banking and Post Office counters I marvel at the fact that they can manage such consistently p*** poor service regardless of who is running each business!