One Year or Two Year Fixed Rate ISA

choi

I'm wondering whether now is the time to go with a two year fixed rate ISA at just over 4%

What's everyone's thoughts on this 

It's looking like rates next year could drop to around 3%

Mark_d

Since rates are going to drop then you're best going for a two year fix.  Although if you might need the money sooner then a one year fix might be the better option.

Dropping interest rate should mean more potential growth from stocks & shares.  So perhaps use an S&S ISA rather than a cash ISA.  I keep some cash in Premium Bonds and in my current account but otherwise I put everything into S&S ISA.

choi

As I'm retired now and getting on in years I don't really want to tie my cash up in a S&S ISA 

Hoenir

Take the best rate now that suits your circumstances. The only thing certain about the tomorrow is uncertainty. 

Altior

Almost every real world indicator is pointing to inflation headwinds in the UK, yet the talking head commentators (and the markets to be fair) are still suggesting the central rate will be nudged down. 

Personally, as I've covered many times, I feel we'll just mirror what the Fed does. Which is anyone's guess right now, but lowering in the very short term seems pretty unlikely to me. 

DRS1

choi said:

As I'm retired now and getting on in years I don't really want to tie my cash up in a S&S ISA 

But you are happy to tie it up in a one or two year fixed rate cash ISA?  If you are concerned about access to your cash then an easy access ISA is probably better - though they have variable rates which may well go down over the next year or two.

surreysaver

DRS1 said:

choi said:

As I'm retired now and getting on in years I don't really want to tie my cash up in a S&S ISA 

But you are happy to tie it up in a one or two year fixed rate cash ISA?  If you are concerned about access to your cash then an easy access ISA is probably better - though they have variable rates which may well go down over the next year or two.

Don't forget money in an ISA can be accessed regardless of whether it is fixed or not, although there'll be a penalty if it is fixed 

Eco_Miser

choi said:

As I'm retired now and getting on in years I don't really want to tie my cash up in a S&S ISA 

But it's not tied up. You can get your money out in about a week.

The catch with S&S is that you may have less money than you put in, although usually you have more.

I'm 75 and have most of my money in S&S ISA, but several years spending in cash deposits of various kinds.