Setting up ISA for first time.

woody76_2

I am in the process of sorting my savings out and have finally decided to set myself up with an ISA. Reading Martins' article and looking at the comparison sites, First Direct is currently way ahead of the competition, yet on their site is states:


6.08% tax free, equivalent to
6.25% AER (fixed) until 6 October 2005
and then
4.22% tax free, equivalent to
4.30% AER (variable) thereafter

Does this basically mean that from 6 October, they won't be giving the best rate, or will all ISA accounts be dropping their rates?

Thanks, Chris

isasmurf

It means the First Direct will not be offering the best rate after 6th October. It is an introductory offer to get you to put your money with them, and then they're relying on the great British inertia to leave it there after the rate drops.

charltonfan1

Im also new to ISA's and have £3k to invest. Will Frist Direct charge me for transfering my money out of the ISA when the rate drops?

Their current offer is:

the mini is back...and still looking good
5.37% tax free, equivalent to 5.50% AER (fixed) until 15 February 2006
and then
3.93% tax free, equivalent to 4.00% AER (variable) thereafter

isasmurf

Currently First Direct do not charge for transferring to another provider... That doesn't mean that they won't introduce one in the future (but as it would be a significant charge to the T&C they should give plenty of warning to allow you transfer before they introduce any such charge)

charltonfan1

So do you think its worth going for one of the 5.2% ones for the whole time to save hassle?