17 year old needing help choosing ISA

sta0612

Hi, I'm new to the forum.

First off, apologies if a thread like this has already been posted or if there's somewhere else I should have posted this. If this is the case, feel free to re-direct me.

I'm 17 years old and I'm looking to open an new ISA. My problem is that all of the good interest accounts I've looked at either don't allowed transfers in or are 18+.

Here's some information that might help. My ISA's currently at NS and I where I have a balance of £3,640.51. I also have around £800 ready to put into this year's allowance.

Could someone please help me choose the best ISA for me.

Thanks in advance,

Sam.

Lokolo

Egg ISA. Varaible @ 6.05% atm. Easy to open. Then when you turn 18 you can transfer it elsewhere if you want.

sta0612

Thanks for your reply Lokolo, but according to their website you cannot transfer in to an Egg ISA.

Baldur

sta0612 wrote: »

Thanks for your reply Lokolo, but according to their website you cannot transfer in to an Egg ISA.

Check through this post, scroll down to "Variable rate mini cash isa's that accept transfers in:" and look up the minimum eligible age for the ISAs - e.g., Icesave (6.10%) is 18 but Principality (6%) is 16.

sta0612

Thanks Baldur. I had a look through that post and found it very useful. Am I right in saying then that the highest interest rate I can get is 6% unless I go for the Scarborough BS (30 days notice) mini cash ISA or Nationwide Fixed Rate ISA Bond, both of which I haven't heard very good things about through this website? The only other one which caught my eye was the Dunfermline BS Regular Saver ISA which has an interest rate of 6.85%. There must surely be a reason as to why this has such a good interest rate compared to the others though? The only snags I could find were that it requires a monthly deposit of £10-300 which I'm fine with and that I would have to operate it by post/phone which could be a bit more hassle than operating via the internet but surely can't be too difficult? Am I mistaken here?

Baldur

sta0612 wrote: »

Thanks Baldur. I had a look through that post and found it very useful. Am I right in saying then that the highest interest rate I can get is 6% unless I go for the Scarborough BS (30 days notice) mini cash ISA or Nationwide Fixed Rate ISA Bond, both of which I haven't heard very good things about through this website? The only other one which caught my eye was the Dunfermline BS Regular Saver ISA which has an interest rate of 6.85%. There must surely be a reason as to why this has such a good interest rate compared to the others though? The only snags I could find were that it requires a monthly deposit of £10-300 which I'm fine with and that I would have to operate it by post/phone which could be a bit more hassle than operating via the internet but surely can't be too difficult? Am I mistaken here?

The Dunfermline 'regular saver' account means that you cannot obtain that high rate on a lump sum, so would only be able to pay in your £3,600 ISA allowance over twelve months, thereby reducing its interest-earning potential, especially as postal transactions will each take several days (at least) to reach your account. The current rate is 6.60% & the account does not appear to support inward transfers - there are also penalties for early withdrawal/closure.

sta0612

Well I only have a lump sum of £800 to invest into this year's allowance at the moment which I could deposit over the first 3 months. However, do you still think I would be better off going somewhere else? What are your views on the Scarborough BS (30 days notice) mini cash ISA and Nationwide Fixed Rate ISA Bond ?

Baldur

sta0612 wrote: »

Well I only have a lump sum of £800 to invest into this year's allowance at the moment which I could deposit over the first 3 months. However, do you still think I would be better off going somewhere else? What are your views on the Scarborough BS (30 days notice) mini cash ISA and Nationwide Fixed Rate ISA Bond ?

If you feel, as many do, that rates are likely to drop over the year, then the fixed rate option may appeal - I certainly moved all of my previous years' Cash ISA funds into a 6.5% fixed rate product in March - the limitation in your case would be that you can't add funds after the opening payment, but you can open separate NW ISA Bonds up to the £3,600 limit.

The Scarborough one appears to have a 30 day closure charge for transfers to other providers, so I personally wouldn't consider it.

sta0612

Thank you again for your quick reply and all the advice you have given me. The Nationwide Fixed Rate ISA seems rather confusing and considering my relatively small balance, I don't feel that the 0.15% extra interest over the other ISAs offering 6.00% interest is really worth the hassle. In which case I have to decide between Abbey Direct ISA (issue 2), Alliance & Leicester Direct ISA (issue 4), Principality BS e-ISA and Newcastle BS ISA Plus. Which would you recommend?

Baldur

sta0612 wrote: »

Thank you again for your quick reply and all the advice you have given me. The Nationwide Fixed Rate ISA seems rather confusing and considering my relatively small balance, I don't feel that the 0.15% extra interest over the other ISAs offering 6.00% interest is really worth the hassle. In which case I have to decide between Abbey Direct ISA (issue 2), Alliance & Leicester Direct ISA (issue 4), Principality BS e-ISA and Newcastle BS ISA Plus. Which would you recommend?

The first two have bonuses/special rates, which drop in 12/13 months by 1% -1.5%, in addition to any interim drops caused by BOE rate reductions - you'd certainly need to watch them both, or you could be receiving a very poor rate after the bonus period.

The Newcastle one only pays 6% on balances over £3,000 - it's 5.5% on lower balances.

Of the 4 that you have indicated, the Principality looks the best, for your circumstances, as it pays 6% on all balances of £1+ and (from a quick look) no hidden 'nasties' jump out of the Terms & Conditions BUT the choice is yours.

sta0612

Sorry for the complication/change in direction, but I was just thinking could I not transfer my existing ISA into one of the aforementioned and then open a new ISA with say National Counties, who have the highest Cash ISA interest rate yet do not (yet) allow transfers in? As for Principality, is there any guarantee of the rate staying X% above the BOE Base Rate as I read in the Newcastle info. sheet that their rate is guarenteed to be no less thn 0.50% above the BOE Base Rate until Feb 2009?