Rates Dropping - what do i do?

Baldur

PBA wrote: »

How do you figure A&L is better than Abbey? A&L is 6.25% inc bonus until 31.5.09. Abbey is 6.25% inc bonus for 1st 13 months. Surely that makes them almost identical?

Who said better? What I said was "there are other ISAs on offer with similar rates which are more transparent, e.g. Alliance & Leicester's offering."

If you look at the Abbey offering, their rate drops by 1.5% after the 'preferential' rate for amounts less than £9,000 - A & L's is a simple & transparent 1% drop, whatever the amount in the ISA - anyone leaving their funds in the ISA after any bonus period (and there are likely to be many), through lack of knowledge, apathy, etc. is likely to be at a disadvantage with the Abbey product in comparison with the A & L one.

Many people (as you've demonstrated) only see the headline sales pitch, rather than looking deeper.

Newly_retired

Don't transfer the interest out of an ISA or it will lose its tax free status.

Megalomaniac

Newly_retired wrote: »

Don't transfer the interest out of an ISA or it will lose its tax free status.

A little confusing that statement... don't WITHDRAW money from your ISA as you will lose its tax free allowance.

However, you can TRANSFER the funds in your ISA to a higher paying ISA account using a transfer form from the new ISA Provider

Also, I do agree with Newly retired that, don't have your interest paid to another account, but can't say I have seen this option being offered, but maybe it exists. If you keep the interest in the ISA, that too will be compounded.

Curbside

ok....so at the moment im probably going to transfer my ISA and add money to a new ISA to Abbey......having £6600 with them by july.

Then i will look at the other money and adding it to a high interest account possible.

someone recommended that removing it from the ISA and putting thee £10,000 total into 6.86% account with Kaupthing having it fixed for 12 months as i wont need to touch this money for 18 months. that way after one year i will have £10,548.80 and 6 months more to invest it after.

working it out seperatly - £3000 transfer from old ISA tax free 6.25% will be £3187.50. Then adding £3600 to my new ISA will leave me with 3825.00. Then the £3400 left adding to a high interest account (the best so far is online 6.5% from Kaupthing) which will leave me with 3576.00.

so thats totalled Kaupthing @ 6.86% = £10,548.80

Curbside

or split up its £10,588.50

so splitting it up is £40 more profitable ok seems thats the best way.

ryandj

What about the Barclays ISA for this tax years £3600 ISA money? You cannot transfer in previous years, but it is currently 6.5% inc 1% bonus for a year i believe. It is variable, but as it is a market leader, people at Barclays say it is unlikely to change for a while (how believable this statement is I am not sure though).

Anyway, that is what I have paid into this year.