Is the A&L ISA A Good Option?

jizba

I have £15000 in an existing ISA paying 5.5%, I want to transfer this into a higher paying ISA. I do not qualify for the Lloyds TSB ISA as I live in Northern Ireland so I can't visit a branch. However I have noticed Alliance And Leicester pays 6.25% on ISA's and allows transfers, is this ISA my best option?

Incidentally this ISA mentions "A 1.00% bonus payable to 31.05.09," what does this mean? Please excuse my ignorance.

Thanks in advance.

Crabman

The 1% bonus is paid until May 2009 - this means after that date the rate will drop by 1% so it's likely you'll need to transfer to a better provider around that time.

It's a good rate, I've arranged to transfer last year's ISA into there and it's the highest I could find (apart from that Lloyds account) which accepted transfers in.

jizba

Crabman wrote: »

The 1% bonus is paid until May 2009 - this means after that date the rate will drop by 1% so it's likely you'll need to transfer to a better provider around that time.

It's a good rate, I've arranged to transfer last year's ISA into there and it's the highest I could find (apart from that Lloyds account) which accepted transfers in.

Thanks, does this mean the rate will remain at 6.25 up until this date?

Am I also correct in assuming there are no penalties for removing or transferring money from this account.

Crabman

The interest rate generally depends on the Bank of England's Base Rate & whether Alliance & Leicester pass on any increase/decrease.

You're free to transfer out of this account as there are no penalties/charges

jizba

Crabman wrote: »

The interest rate generally depends on the Bank of England's Base Rate & whether Alliance & Leicester pass on any increase/decrease.

You're free to transfer out of this account as there are no penalties/charges

That's good to know regarding the fact there are no penalties/charges for transfers.

My real concern is the fact the due to the credit crunch, this ISA rate may drop significantly. Do A&L keep their customers up to date via email of any pending change in interest rates?

Crabman

If there is a drop in A&L's rate or a new best-buy account for ISA transfers it will be included in Martin's weekly email (sign up here if you aren't already)

A&L will probably let you know by post though you could always refer to their current interest rates.

YorkshireBoy

jizba wrote: »

My real concern is the fact the due to the credit crunch, this ISA rate may drop significantly.

If it does, then other providers' rates will probably also fall. When I last had an A&L Direct ISA though (including bonus), it's fair to say that the underlying variable rate remained competitive throughout the bonus period. No guarantees it'll do the same this time though.

Do A&L keep their customers up to date via email of any pending change in interest rates?

Do any providers warn you beforehand that they're cutting rates?

jizba

YorkshireBoy wrote: »

Do any providers warn you beforehand that they're cutting rates?

IceSave were very prompt and professional at alerting their customers when they dropped their rate.

YorkshireBoy

jizba wrote: »

IceSave were very prompt and professional at alerting their customers when they dropped their rate.

But you used the word "pending". Did IceSave notify you (personally) of the cut beforehand?