5%+ ISA rates

Darnhall123

With ISA fix interest rates currently available in excess of 4.7% and rising, do you think we’ll get back to 5%+ rates this year?

I’m looking to lock away £20k using my wife’s allowance, but wondering if I should hang fire seeing as rates don’t look as if they’re going anywhere other than up at the minute.
I know that no one has a crystal ball, but just wanted to get a few different opinions or thoughts before committing to anything

I locked into a Shawbrook 5yr fix 4 years ago @ 5.22% and maxing it out every year so hoping to get a similar deal for her.

Newbie_John

How long would you lock for? There are gilts with up to 5.7% right now:

https://giltsyield.com/bond/

Darnhall123

https://forums.moneysavingexpert.com/discussion/comment/82032255#Comment_82032255

Thank you. Happy to lock away for 5 years as long as I can add 20k at the same interest rate every year. That’s what I’m currently doing with Shawbrook.
I’ve just clicked on your link but it’s like Japanese to me i’m afraid, I really don’t understand. My understanding is very basic, (hence the simplicity of a cash ISA).

CeliaSeas

I have a collection of crystal balls, most of them say yes, we will have 5% + rates

refluxer

https://forums.moneysavingexpert.com/discussion/comment/82032360#Comment_82032360

This is actually really rare. There are literally only a few ISA providers who allow you to pay in new ISA subscriptions each tax year throughout the duration of the fixed rate period - Shawbrook are one and Barclays is another. Kent Reliance used to, but I think I read somewhere that they have stopped allowing this.

Newbie_John

https://forums.moneysavingexpert.com/discussion/comment/82032360#Comment_82032360

Its little bit complicated at the begibeginning, but once you get it it's easy.

These are UK government bonds, so as safe as UK.. if you sort by gross yield - that's the final return.

The only ones paying over 5% are 10 years plus, let's pick two examples:

T36N - returns 5.004% as I write it, of which 4.875% comes as interests twice a year, and the extra 0.2% comes from the price difference that government will pay you in 10 years time. Expires in 2036. This one is good for ISA as yield is taxable as interests.

TG35 - returns 4.878% as I write it, of which 0.6% is paid to you twice a year (0.3% each time) and the rest 4.2% (or actually 42% as it's 10 years) is paid in 2035. This is great for outside of ISA as the 42% part is tax free, and you only pay tax on the 0.6% as nornal interests.

To buy them - you will need to open an GIA or S&S ISA, for example Barclays Direct Investing which is now fee free (just £6 per purchase).

But the price/returns vary every minute really, and if you keep it till maturity you know what you will get - but if you want to quit earlier you may get less/,more depending on what's the price.