Halifax ISA Question and some more general questions!

Opera14 · 26 May 2008 at 8:54PM

Hi, I currently have an ISA with Halifax - I went with them initially without doing any real research, but I've realised now that the interest is pretty poor - it's only 5% and I'd much prefer to go with someone like A & L with a higher interest rate. Only problem is, I've invested £1000 already this tax year, and I think Halifax allows transfers out and in, but am I right in thinking that if I transfer out I will only be able to invest £2,600 in total?

The other thing is, I'm taking a gap year and trying to save up for uni. I'm going to be working pretty much the whole year and think I can set aside around £10-12k either to save or invest, but I'm not really sure what the best method is! It's definitely long term savings, so I was thinking of filling up my ISA, and sticking the rest in a fixed term deposit account? I'm confident I can leave it in for 3 years or so without withdrawing.

So..is there anything anyone can recommend?

Thanks for your help

LittleVoice · 26 May 2008 at 9:27PM

Regarding the ISA - if you properly transfer out the original £1K plus interest to date, then you will be able to add £2,600.

When did you open the Halifax ISA? Are you in the cooling off period? If you are then you could close the Halifax and still invest the full £3,600 elsewhere in an ISA which doesn't allow transfers in.

Opera14 · 26 May 2008 at 9:35PM

Sorry I'm unfamiliar with all the terms! What's the "cooling off period"?

I had around £500 in there at the end of the 07/08 financial year, and have invested an additional £1000 for this financial year (back in April).

I think I want to go for A & L, and it says on their website that it allows transfers in, but when I click apply and read the conditions it says "You have not contributed to another Cash ISA in the same tax year that you subscribe to this Cash ISA", I put in £1000 this tax year, does this mean I won't be able to transfer to A & L?

Also, what does this mean:

"The rate above includes an unconditional bonus of 1.00% Gross/AER until 31st May 2009 for accounts opened from 8th February 2008."

Thanks

LittleVoice · 26 May 2008 at 10:03PM

"Cooling off" period can apply when you open a savings account (except fixed rate accounts) which mean that if you decide the account is not for you (usually within about 14 days) then you can close the account. You will find reference to this in their T&C. However, if you opened the Halifax ISA account in the previous year then this would not be applicable to you. If it did apply to an ISA account opened this year and you closed the account, it would not count towards your £3,600 total and you would be able to start another from scratch. However, as I've written, this does not apply to your case as you already had the account.

I agree the A&L site is probably a bit confusing regarding transfers in for accounts to which you have already subscribed this year. You would need to go into an A&L branch to start the transfer process, so I would complete the forms there to make sure that it takes account of the fact that you are transferring in 2008-09 funds (or establish that they won't allow this). Maybe someone who knows more about how the A&L system works will come along to give you a better idea soon.

The wording about the unconditional bonus means that whatever they do regarding the variable rate (currently 6%) it will include 1% counted as a bonus up to 31 May 2009 (ie into the next tax year). However, because the overall rate is variable, the total 6% may be reduced (or increased). It is not itself a fixed rate.

Opera14 · 26 May 2008 at 10:13PM

Thanks for that, really helpful!

Hmmm, I guess I might want to reconsider. The Halifax rate was 5.75% but now it's only 5% hence my reason for wanting to change, but if in a few months' time A&L's rate also drops then there's not much point!

The only fixed-rate one I can find is Northern Rock, which is 'til April 09. Would it be wise to go with that then, and then transfer again in April to something better (as it will retract to the Base Rate)?

Actually, NR is only by post, I definitely want to be able to bank online. I will have a look around but any recommendations are welcome!

KeithEssex_2 · 26 May 2008 at 10:32PM

Have you considered switching to a 1 year fixed rate with the Halifax ?

Still paying 6.00% AER ...

http://www.halifax.co.uk/savings/personalrates.asp#Fixed_rate_Halifax_ISA_Saver

Opera14 · 26 May 2008 at 10:51PM

Ahh didn't see that! The only problem is that they don't allow additional deposits, I guess I could wait until I have the whole lot before sticking it all in there, but I would prefer something else.

KeithEssex_2 · 26 May 2008 at 11:06PM

Re: Bonds

Personally if I was in your situation I wouldn't want to tie up my money for 3 years. You could easily need the money for something urgent during that changeable period of your life.

For the 6 months to 1 year range I like the Halifax Fixed Rate Websaver accounts:-

6 months 6.60% AER
9 months 6.70% AER
1 year 6.60% AER
(2 years 6.40% AER)
(3 years 6.40% AER)

For the 2 year period I like both the Yorkshire Building Society and Chelsea:-

2 years 6.50% AER

Halifax ISA Question and some more general questions!

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