Transferring from Virgin fixed rate 1 year ISA to Santander fixed rate 1 year ISA

craig1805

I currently have £10,000 in the Virgin fixed rate e-isa 683 which I took out in January this year with an interest rate of 4.11%. I'm now thinking of transferring it to the Santander 1 year fix at 4.5%. This would mean that I there would be a 60 day penalty for closing it (worked it out to be £68 and would be £43 worse off based on the additional 8 months interest with the higher rate)

I understand that this would qualify me for the £50 e-voucher, but this aside, would you think it's sensible to initiate the transfer bearing in mind that once the Virgin fix ends in January next year, I will then be able to put this money in another ISA but risk the interest rate falling.

What would anyone do in this situation?

flaneurs_lobster

If it were just a £7 bonus (assuming your calcs are right) then definitely not.

Any other consideration would mean predicting the interest rates in 8 and 12 months time, an inexact science.

Most punters seem to be guessing little or no change over the next year but your feelings might differ.

craig1805

Many thanks Flaneurs, that gives me food for thought.

There is also the convenience of having this in the same place as my current account without having to log in separately to the virgin money site (as it's not available in the app).

flaneurs_lobster

I've got money in a similar Virgin fixed ISA. Can't say that only having access online is a particular concern - it's a fixed rate product that I don't need nor want to access until it matures.

A flexible, easy access product would be a different matter.

elkiedee

Needing to find a new ISA that accepts transfers at the end of this period is going to be an issue to face whether this is in January 2027 (in the current tax year) or in April 2027 (in the next one).

And I also think that not having all your money available on one app/one login isn't entirely a disadvantage. I have quite an old mobile (Iphone 7) which doesn't run the most recent operating systems and can't access my Coventry BS accounts - they're not fixed rate but I do regard them as longer term savings than most of the accounts that I can access on my phone, and stories about phone thefts etc do make me anxious.

craig1805

I'll almost certainly leave things as they are. It's not something I will need to have access to continuously, so for something that will only give me around £7 profit.

My Zopa 1 year regular saver has recently matured, so will still be opening the Santander ISA and putting this money in there. With current world events, it looks like interest rates will stay as they are for the next few months and in any case, once the Virgin ISA matures I may transfer that to an instant access ISA until late March as typically there are some good fixed rate ISA offers at the end of the tax year.

Thanks for all your inputs, they have been useful.