Nationwide Members ISA Bond?

Plasticman · 20 April 2005 at 8:46PM

My ISA is currently with Nationwide and only earning 4.85%. We are using it for long term savings and put in 3K each year in one lump sum. I have been very happy with the service that I have received from Nationwide but with others offering much higher interest rates it's time for a change.

I have looked at the top ISA's but don't really want to keep transferring and don't want to pay a fee if I have to transfer. I was planning to sign up for an Abbey postal ISA but just as I had made up my mind I found out about the Nationwide Members ISA Bond. It requires 60 days notice to withdraw and you can only pay in one lump sum each year but neither of these are a problem for me. It only pays 5.15% (versus 5.35% with the Abbey) but could this be a better option as it is more likely to offer a reasonable rate long term? I'm assuming that the Abbey rate is unlikely to stay high long term. Any opinions will be gratefully received

newfoundglory · 21 April 2005 at 12:41AM

I have to completely agree with you.

A few years ago I had the normal Nationwide cash ISA. I moved to HSBC because they were much more competitive at the time - but within a few months HSBC had become very uncompetitive. I moved back to Nationwide; but I moved into the Members' ISA Bond this time (which I still have)!

People have a go at Nationwide for not always being "at the top". But Nationwide are actually great, because as you say they always "remain competitive" so you don't have to worry about switching every 5 minutes - which I no longer have the patience to do when it comes to ISAs!! The rate will never be at the top, but I know its always going to be paying a good rate so I dont have to worry about checking the rate so often!

Once upon a time Halifax and ING were paying more than Nationwide e-savings... but no longer there either! They definitely seem to concentrate on offering this longer term value, rather than a quick 6-month bonus rate to get into the rate tables.

:beer:

Trying2Save_3 · 21 April 2005 at 11:11AM

Hi there, I'm in the same boat as you. I have a Nationwide ISA which I deposit £3,000 in a year, but prompted by Martins moneysaving tips email, I have started looking around. I'm now really confused - should I switch, should I stay? I thought about it last year and ended up doing nothing!

prenticesa · 21 April 2005 at 12:48PM

Whether or not to change is down to how much effort you wish to go to.

Nationwide are a very good company in my experience. Their accounts are not usually the highest rate available, but are consistently very close. If you don't want the hassle of changing accounts each year, Nationwide are the ideal choice.

The difference between Nationwide (5.15%) and Abbey (5.35%) is worth £2 per year for each £1000 invested. If you have the maximum £23000 invested, this makes a difference of approx. £46.

I have invested in an ISA every year since they were launched, and have changed provider several times (approx. every year?).
The transfer process is very straight forward, and I've never had any problems, or delays.

Stonk · 21 April 2005 at 12:56PM

If you have a "standard" Nationwide cash ISA (e.g., because when you opened it you hadn't been a member for 3 years and therefore couldn't have the "Members" version), I'd have thought you could turn it into the "Members" version after three years. It sounds like you might be in that position. If so, that would provide an interest boost to take you a comforting step nearer the best, and ought to be very simple and quick to effect - maybe just a phone call...?

Like the other poster, I know my Member's ISA isn't right at the top of the table, but it's close enough (best equivalent is 0.20% more, i.e. £6 per year per £3K deposited) and they're so damn good I will stay with them.

If the gap was 1%, that would be a different matter.

david78 · 21 April 2005 at 8:02PM

Nationwide run the Member ISA Bond and Passbook Instant Access ISA as one account, so you can mix and match contributions to both in the same tax year. e.g. you can put £2000 in the ISA bond and £1000 in the Instant Access ISA. You can only make one deposit into the bond each tax year however.

I don't know if you can switch from the Instant Access to the Bond account though. I think they allowed something similar with their TOISA (again available as instant access/bond mix) but I have lost the details of this. The website is less than helpful to.

Milarky · 22 April 2005 at 9:18PM

david78 wrote:

I don't know if you can switch from the Instant Access to the Bond account though. I think they allowed something similar with their TOISA (again available as instant access/bond mix) but I have lost the details of this. The website is less than helpful to.

Yes, I tihnk I was told you could. Also, I think that Nationwide told me you could transfer from Bond to Instant Access - but could only do this once - implying that you have to stop adding to the bond or else transfer it altogether - and you can't have another one thereafter.

Although the Bond is 60 days notice/lost interest for the one withdrawal a year it bizarrely allowed me to transfer out to First Direct without notice or lost interest. Technically they classify the Instant Access and Bond as a single ISA - thus you can subscribe to each in the same year as it is just a 'split' subscription.

Then there's the Nationwide TOISA. This becomes either an Instant Access or a Bond account for withdrawals but unlike the other accounts [don't ask me why] you cannot paritally transfer it to a different ISA provider - you have to effectively 'close' the account and transfer the whole lot out. [By 'close', I mean 'transfer' naturally]

[Hopefully when FD's rate drops in October I have the option of transferring back to the Bond -whereas if a sufficiently better rate crops up elsewhere -with no restrictions on transfers - I know I can transfer more/all of the Bond to that - along with the FD money]

Laura_2-2 · 23 April 2005 at 2:11PM

as of 01/05/05 Abbey's rate is apparently going to be 4.9% so definately bond is better option!

david78 · 23 April 2005 at 6:39PM

Really Laura. I'm glad then I avoided Abbey for this year. My £3000 for 05/06 is in the M&S ISA (still earning 5.25% when I last looked.) But I am prepared to transfer it, if it gets uncompetative. One option would be to transfer it to top-up my Nationwide ISA bond, but as I like to spread my money around a bit I will also look elsewhere.

codetown · 2 March 2006 at 1:45PM

Hi,
I would like to trasfer out a Nationwide Bond ISA. Does anyone know for sure if the 60 days loss of interest is not applicable when transferring out?
If it is how do you do notice and then transfer on the last day of notice?

Nationwide seem to have no clue about this!

MiserlyMartin · 5 March 2006 at 8:53PM

I have the same ISA as you and this is a very good question. I would also like to know what they do about transfers out. So I just looked at the T's& C's. It says that if you wish to transfer to another provider we will perform the transfer within 30 days or another time period requested by you, whichever is the longer. (In English read 30 days)

Nothing there about loss of interest. This should only apply to withdrawals or closure, which is a different thing to a transfer.

This is the way I read it anyway.

They like to keep quiet about transfers, as a result the staff don't have to deal with it very often so get confused.

Nationwide Members ISA Bond?

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