Silly question (?): why are ISA rates always higher at fiscal year end?

ScarletBea

As I wrote on the title, why are ISA rates always higher at the end of the fiscal year?
Do they really think that people who haven't used their ISA portion, will suddenly come up with £3000 in a couple of weeks?

It just seems so silly, and unfair for those who actually deposited earlier in the year.
(ok, I know, interest during the year vs later, etc, but you see my point I hope)

alastair_h

ScarletBea wrote: »

As I wrote on the title, why are ISA rates always higher at the end of the fiscal year?
Do they really think that people who haven't used their ISA portion, will suddenly come up with £3000 in a couple of weeks?

It just seems so silly, and unfair for those who actually deposited earlier in the year.
(ok, I know, interest during the year vs later, etc, but you see my point I hope)

Trying to attract new business for the next financial year from 6th April (some will drop after this and they hope you don't notice and leave your money in place, people who keep an eye on them will transfer if/when a better rate is available / or worthwhile moving).

isasmurf

ScarletBea wrote: »

Do they really think that people who haven't used their ISA portion, will suddenly come up with £3000 in a couple of weeks?

No. They know it. Last year 1.8m people didn't put anything in to a Cash ISA until the last 3 months.

ScarletBea

isasmurf wrote: »

No. They know it. Last year 1.8m people didn't put anything in to a Cash ISA until the last 3 months.

Really? Gosh. I thought people would have a bit more brain than that... why have the money earning taxable interest when you could have it earning tax-free interest from day 1? It's not as if savings accounts reates are so much better than the top ISA ones.

Lokolo

ScarletBea wrote: »

Really? Gosh. I thought people would have a bit more brain than that... why have the money earning taxable interest when you could have it earning tax-free interest from day 1? It's not as if savings accounts reates are so much better than the top ISA ones.

Summer - holidays
Winter - xmas
Spring - er.... um nothing? so shove it in the ISA

bristolleedsfan

ScarletBea wrote: »

Really? Gosh. I thought people would have a bit more brain than that... why have the money earning taxable interest when you could have it earning tax-free interest from day 1? It's not as if savings accounts reates are so much better than the top ISA ones.

Everybody has different circumstances, some people might be Non Taxpayers thus decide to obtain higher rates of interest in Non ISA Accounts for most of the year and then plonk 3000 into an ISA at the end of the tax year so as to not lose their ISA allowance for that year and to possibly avoid their savings income pushing them into a taxable situation.

tiptoe_mouse

bristolleedsfan wrote: »

Everybody has different circumstances, some people might be Non Taxpayers thus decide to obtain higher rates of interest in Non ISA Accounts for most of the year and then plonk 3000 into an ISA at the end of the tax year so as to not lose their ISA allowance for that year and to possibly avoid their savings income pushing them into a taxable situation.

This is the case for me. Plus I like to wait until the end of the tax year precisely so I can take advantage of these last minute offers.:D

tiptoe

bristolleedsfan

ScarletBea wrote: »

As I wrote on the title, why are ISA rates always higher at the end of the fiscal year?
Do they really think that people who haven't used their ISA portion, will suddenly come up with £3000 in a couple of weeks?

It just seems so silly, and unfair for those who actually deposited earlier in the year.
(ok, I know, interest during the year vs later, etc, but you see my point I hope)

Nationwides 6.15% One and Two Year ISA Fix has actually been available since early July 2007, for many months it looked unattractive because non ISA fixed rates went to 6.5%, then 6.7%. then 6.8, eventually hitting One Year Fix Rates of 7%.

Barclays Taxbeater ISA was launched in March 2007 and was still available until May 2007.

Lloyds 6.5% One year fix i believe will be available for a few months so im not entirely sure where the opinion uve formed has generated from.

Off course everybody is entitled to their opinions, perhaps u will post some rate comparison figures to add weight to the theory that u have.

BallandChain

Surely people who pay in early at the beginning of the tax year into their ISA will benefit from more interest than somebody who pays in a lump sum towards the end of the tax year, therefore even if the rates have gone up it shouldn't make any difference to the people who saved from day one?

bristolleedsfan

BallandChain wrote: »

Surely people who pay in early at the beginning of the tax year into their ISA will benefit from more interest than somebody who pays in a lump sum towards the end of the tax year, therefore even if the rates have gone up it shouldn't make any difference to the people who saved from day one?

True. :T Also as most the top ISA rates that are available in March tend to be still available in May I dont see any basis for O/P opinions ( off course O/P is entitled to her opinion and beliefs. )