Cash ISA fixed term

catemitch

I am looking for advice on renewing a fixed rate cash ISA during May 2026. There is not a great deal of difference between 1, 2, 3, 4 and 5 years. However, with war and bank interest I am wondering which way to leap. Can anyone help, giving reasons for the response? At 76 I am not really looking at Stocks & Shares ISA.

masonic

I'm not a fan of fixing for long periods of time. I would want to be compensated for the risk of interest rates rising, and there currently isn't much if any premium for doing so. With a short term fix, you get an opportunity to track changes to interest rates more closely at the risk that you may track them downward. Obviously you can exit a fixed cash ISA at any time, subject to a penalty.

siri_do_one

IF available rates rise enough to offset the loss of interest penalty as given in the T&Cs then it could be worth moving, I've gone with a two year fixed rate this year because future rate changes are really in crystal ball territory until further notice.

There's nothing preventing you splitting the fund over a few providers with similar rates for different term lengths.

RobM99

Not sure but I think Nationwide do an ISA @ 4% that allows one withdrawal without penalty. Nothing to stop someone opening more than one (£20,000 limit applies). Might have to be a customer already though. That's the bit I'm not sure about.

masonic

4% is not looking all that competitive at the moment, although rates have been lifted somewhat for ISA season and could start falling back soon.

GrubbyGirl_2

I normally fix but this year I've taken a 4.3% easy access to tide me over to see what interest rates are going to do. BoE interest rate announcement is on the 30th (I think), we might get a feel then

Albermarle

https://forums.moneysavingexpert.com/discussion/6665182/cash-isa-fixed-term

Nobody can tell you what interest rates will be as nobody can see into the future. Although we have a war in the Middle East and Ukraine now, most likely there will be many other wars in the coming years, or other unforeseen issues, which could affect interest rates in any direction.

Normally/traditionally you get a better rate for tying your money up for longer.

So if ( as an example) the interest rate for easy access, 1,2,3 and 5 years fixes are all the same, this would indicate to me that the providers are predicting that general interest rates will fall going forward.

So although say 4% for 3 years does not look not so great now, it could look good in two years time. Then again it might not…..

GrubbyGirl_2

https://forums.moneysavingexpert.com/discussion/comment/81973058#Comment_81973058

Completely agree, it's a bit of a gamble but also put it into context each 0.5% on £20k is only £100 a year so not a huge loss. Also if you can get 4% for 5 Years you'd need to get 5% on a standard savings account if you're a basic rate tax payer and about 6.7% if a higher rate payer and they don't exist at the moment.

sarah_25

If you start off with a FRISA when it matures can you put it in an easy access one or does it have to be another FRISA to keep the tax free status?

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81973474#Comment_81973474

It can go into kind of cash ISA you wish.( or S&S ISA)

The type of account has no bearing on where it can be transferred to.

bioboybill

https://forums.moneysavingexpert.com/discussion/comment/81973474#Comment_81973474

Yes, you can.