Get ISA now or wait for better rates?

Into what? IMHO the M&S rate is good, OK closed to new customers but existing can deposit 05/06 allowance £3k i think?
Be careful lots of cash isa`s with a slightly higher headline rate have future exit/transfer fees & you loose some days int in transit

iomexico wrote:

Is it best to get invest £3000 now into a new ISA and transfer £6000 from M & S ISA 5.25% or wait and see if any better rates are announced in the next few weeks

The decision depends on two variables - one, the rate of the ISA that might come up in future, and how many days later it is going to come. Since one has to anchor one of these variables to make a decision, let us assume that the higher rate is, say 5.75%, forty basis points higher than the Abbey postal ISA, which is a fair best-buy to begin our assessment with.

If I choose to keep this year's allowance in a high interest account, pending the new ISA coming in, assuming the new ISA will come in x days from now, the interest I lose by not putting it directly into an Abbey postal Isa and putting it instead, into A&L's online saver is:

3000*(5.35-4.28)*x

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36500

If I put it into the Abbey ISA today, and then transfer it into the higher interest paying ISA when it comes, the loss is for the 10-12 days that it will take to transfer the ISA, when you'll lose all interest

3000*5.75*10

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36500

Equating the two, we get a value for x as around 53 days. Which means that I should hold back, only if a more attractive rate of 5.75% is expected within the next 53 days. Now I don't see that as possible, so I am going ahead and making an appointment on Monday to fund my Abbey ISA with this year's allowance.

iomexico wrote:

Is it best to invest £3000 now into a new ISA and transfer £6000 from M & S ISA 5.25% or wait and see if any better rates are announced in the next few weeks

I was in the same position as you earlier this week. I've got £6,000 in a M&S ISA and wasn't sure whether to put my new £3,000 allowance in there too. I decided to stick with M&S, as they have been pretty good so far. The rate is still pretty competitive and they do tend to increase their rate the day after a BOE interest rate rise.

I don't think it's worth waiting around for better rates to come out, as you're losing out now on the tax-free interest that you could be earning on your £3,000. £3,000 in the M&S ISA at 5.25% would earn around 43p per day or £3.02 per week, therefore, each week you choose to delay will decrease the amount of interest you'll receive for 2005/06.

A lot has been said in various threads about investing £3000 into an ISA now. This is good advice if you have a lump sum you are not going to need this year. If you are going to need the money during the year you think a bit more about it. It may not be the best option to invest immediately.

The rule of thumb I use is that on 5th April next year you should have the maximum possible amount in your ISA. What this means is if you have money in savings outside of an ISA on that date and you have not got (not put) £3000 in your (Cash) ISA then you have saved unwisely.

Remember that once you take money out of an ISA you cannot put it back.

YorkshireBoy wrote:

Two points...

1/ I lost (at least) 14 days when I transferred from Safeway (Abbey) to IF last year because Abbey forgot to sign the cheque! Which brings me onto my second point...

2/ Why can't they do it by BACS, as this would ensure max 3-4 days lost, and stop the idiot who put my unsigned cheque in an envelope from making the same mistake again? Would also eliminate any postal problems.

That is obviously out of the norm, if someone doesn`t sign the cheque, however if it can be proved,in your case, that Abbey did not sign the cheque, then Abbey should compensate you.

With refernece to your second point, I have been informed it is to do with money laundering, i.e. if you open a new account you have to open it with a cheque drawn on your current account, therefore the bank transferring your money has to do the same thing, therefore leaving a paper trail, as the info from the bank can lead back to your original deposit from your current account, this info was told to me from M&S Money and sounds plausable,but I do agree with you that we should be able to do it by telegraphic transfers.