NS&I or Baclays

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typeractive
typeractive Posts: 914 Forumite
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in ISAs & tax-free savings
Hi all,

Quick question: I already have 3k in a cash isa for this financial year (with NS&I). The new financial year is upon us and as we all know Barclays are the new best deal. I have another 3k ready to inject into an isa. Should I just continue to use NS&I, as surely the interest on 6k overall would be a wiser move? Or leave that and open a new one with Barclays?

Thanks :)
"The future needs a big kiss"
«13

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  • ManAtHome
    ManAtHome Posts: 8,512 Forumite
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    Whether you put next years with NS&I or Barclays, you still get NS&I interest on the £3k+ you have with them (so still getting interest on £6k, even if at different rates).

    Big decision is where you think NS&I and Barclays will be going next year - if either drops through the floor, you won't be able to transfer into the other one. You'll get about £20 extra with Barclays for the first year, dunno about years 2 to infinity (and beyond..?).

    I'm sticking with NS&I as it's a 'clean' account - your mileage may vary as they say...
  • typeractive
    typeractive Posts: 914 Forumite
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    forgive my stupidity, but would it not be best to have the interest on a total of 6k in one account? or will they only pay interest on 3k? I'm confuzzled :S lol

    thanks :)
    "The future needs a big kiss"
  • missile
    missile Posts: 11,691 Forumite
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    You will get paid interest paid TAX free on whatever your balance is in all of your ISAs. At current rates, you will get more interest next year if you open one with Barclays. Only you can decide whether it is worth the hassle for an extra ~ £20 and who knows what rates will be April 2008.
    "A nation's greatness is measured by how it treats its weakest members." ~ Mahatma Gandhi
    Ride hard or stay home :iloveyou:
  • cafenervosa_2
    cafenervosa_2 Posts: 1,023 Forumite
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    I am in the same situation, I was going to open a Barclays but what manat home says makes sense. We would gain in the first year with Barclays but who knows about beyond that. With NS&I you know what your getting long term as I think the account is guaranteed to be a certain level above the Bank of England rates, what about the Barclays.....I don't think so. We could find ourself longer term if say interest rates go to 7% with the Bank Of England with A NS&I with rates of 8% or so, and a Barclays of still 6% or under?

    Its a tricky one, the biggest problems with isas is you can't move the money around easily without affecting your yearly allowance, once the money is in there its best staying until you NEED it for a house for something.
  • Estavez_2
    Estavez_2 Posts: 9 Forumite
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    NS&I rates are guaranteed to be at least 0.5% above the interest rate until april next year I believe they said. And from what I gathered (from the jist of things) is that it may continue like that afterwards...
  • trets77
    trets77 Posts: 2,886 Forumite
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    and after the whistleblower program ( which told us what we always suspected) do you trust Barclays not to do the following

    1) hassel you with sales phone calls
    2) sign you up something you never asked for
    3) give you good customer service when you come to move your cash and do to quickly without problems
    4) stay compeitive ( does not track B of E)
    5) tack a charge of some sort on the account futher down the line.

    My next allowance is staying with NS & I as i answer NO to all of the above
    Better in my pocket than theirs :rotfl:
  • jyonda
    jyonda Posts: 477 Forumite
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    Trets77 you are soooooooo right. Just went a signed up for the NS&I ISA on line and it took less than 3 minutes. Now I don't have to sit up at night worrying if my ISA rate will stay competitive and shift my balance around annually hooked by headline rates which are a loss leader for other stuff. Oh yes, but they'll want their pound of flesh one way or another!
  • gogsboy
    gogsboy Posts: 527 Forumite
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    Can someone explain what the issue is with Barclays, the deal looks good on paper.....so why not?

    Thanks
  • stuartw101
    stuartw101 Posts: 381 Forumite
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    This is the decision i have to make, im hoping to pay in £3,000 before the end of the tax year and then an amount gradually through out the 07/08 tax year.

    I just don't know which one to go for.
  • save-a-lot
    save-a-lot Posts: 2,809 Forumite
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    Hi

    I am going to stick with the NS&I Direct ISA as it tracks the BoE base rate and looks to be a better long term prospect, as the Barclay's ISA does state

    Barclays: † These rates include an introductory bonus of 1% gross. The bonus will be paid for 12 months from the date you open your account with a minimum of £1, after which time the rates will reduce accordingly. Bonus offer may be withdrawn at any time.

    after the first year it will pay 5.5% with Barclay's (or whatever rate they choose) - who knows what NS&I will do in the future, but I feel more comfortable with my money there.
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