ISA - Transfer now or wait ?

edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
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exel1966exel1966 Forumite
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edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
I currently have a YBS ISA with £3000 deposited this tax year, which pays a relatively good 4.9%.

I know there are a couple of better rates out there to be had - A&L for example, but is it really worth transferring now or would I be better off waiting til just before the new tax year commences in the hope that a few of the bigger financial houses bring out 'Headline' rates to entice new customers. Do they usually do this type of thing or shall I transfer now and then again if a better offer comes along ? How long does a transfer from YBS to another usually take ? Transferring twice may just mean a large number of days whilst the money is in transit not earning interest.

Any advice/help greatly appreciated. Cheers.

Replies

  • Kazza242Kazza242 Forumite
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    This is just my own opinion:

    I think the best mini cash isa's are those that pay a good and consistent rate of interest to savers. I'm not a big fan of accounts that pay short-term, rate inflating bonuses, because when the bonus expires you have the hassle of constantly transferring your money elsewhere.

    Your YBS isa at 4.9% is still a pretty good rate. In terms of non-bonus rate mini cash isa's, only Halifax and Bradford & Bingley are better at 5% respectively.

    It is hard to estimate how long a transfer will take, as it depends on how efficient both providers are. In some cases the provider you are transferring to will start paying you interest from the day your funds have left your old provider.

    I think that some new mini cash isa offerings will be launched over the next couple of months, so it is worth keeping a look out for something better. I'm sure you know this, but when transferring contact the provider you wish to transfer to and ask them to carry out the transfer. Do NOT withdraw your money and take it to the new provider!
    Please call me 'Kazza'.
  • Bargain_RzlBargain_Rzl Forumite
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    I was just about to come onand ask the same sort of question. I have 2 years worth of mini cash ISAs (£6k + interest) currently languishing with First Direct. Anybody suggest whether it's worth my while transferring to Halifax now?

    It's not so much that I'm worried about other providers coming up with marginally better offers, but is there a general view that the Halifax's interest rate (currently 5%) is likely to remain competitive?

    If I'm going to transfer to Halifax I'm keen on doing it ASAP cos I'm looking at having more Halifax products anyway - planning on opening a Regular Saver account in mid March (to mature in time to feed a 2007/08 ISA) and will also be looking to fill up my 2006/07 allowance as soon as the tax year starts.
    :)Operation Get in Shape :)
    MURPHY'S NO MORE PIES CLUB MEMBER #124
  • Kazza242Kazza242 Forumite
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    Bargain Rzl,

    I don't know what interest rate you are currently receiving from your First Direct isa (4%?), as they have recently launched so many versions of it that it's been hard to keep up. ;)

    If I was receiving BOE base rate (4.5%) or less from my isa, then I would definitely transfer my isa savings to another provider. Halifax have been paying a good rate for more than a year on their Isa Saver Direct (currently 5%). They are also very good at paying you interest quickly when you are in the process of transferring to them. Interest starts being paid from the day that funds leave the other provider.

    If you aren't getting a decent rate where you are now, then there's no point in staying, as there are better rates to be had elsewhere. The next couple of weeks are going to be the only quiet time left before isa business goes into overdrive from mid-February onwards. We are approaching the busiest time of the year for isas, so if you are going to transfer, I would do so now.
    Please call me 'Kazza'.
  • Bargain_RzlBargain_Rzl Forumite
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    Kazza,

    Thanks, that's what I was thinking (on all counts).

    Just weighing up the Halifax and A&L accounts but am not planning to leave it longer than the next couple of weeks before transferring, foe the same reasons you mentioned.

    FWIW, I haven't been following the progress of the interest rate on my FD account since the bonus rate dropped, as I've known it was uncompetitive and have been meaning to transfer. But it was the issue which was available with 6.25% inc bonus until last October - I opened it last March and filled it up again on 6th April so now have £6k plus interest.
    :)Operation Get in Shape :)
    MURPHY'S NO MORE PIES CLUB MEMBER #124
  • MilarkyMilarky Forumite
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    Just weighing up the Halifax and A&L accounts but am not planning to leave it longer than the next couple of weeks before transferring, for the same reasons mentioned.
    I have applied to both A&L and Halifax regarding transfers (it's all right you can contact both as long as you only follow though with authorising one of them) I'm put off the A&L by their T&Cs relating to when they start paying interest after reciept of the cheque. By the same token I'm attracted to Halifax by their ''no lost-day's'' interest promise. if the rate difference is just 0.2%, for instance, and it takes 10 days to transfer to A&L or for them to treat received funds as cleared then it would take 250 days for the A&L higher rate to recoup this loss. So I'm going for the Halifax option.
    .....under construction....
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