Dear Wanderstg

Apologies for confusing everyone. I am a little more educated now on how ISAs work. I knew what I needed for this year but did not realise that there were fixed rates out there - so that was a bonus which I have taken advantage of.

I did not know which providers took transfers from previous years: neither did I know (once again) the variety of available options, ie, fixed, variable, trackers etc.

Not surprisingly, after a whole day plus of sorting things out, you can ask me anything about ISAs and I will point you in the right direction (or maybe not?).

Thanks to all you helpful bods out there

ebabe

forumfan,

I wasn't too sure. When I read ebayb's post initially I thought one thing, and then later after reading it again I thought another. So I thought I'd try and make it clearer regarding bonds / ISA bonds. You always wonder what level to pitch a response at. Is someone asking the difference between bonds / fixed term accounts and variable accounts, or asking the difference between ISA and non ISA cash accounts?

wanderlustg: I had the impression ebayb meant normal bonds in her post, but thanks for bringing it to everyone's attention.

Hi Eileen,

It appears that the current best fixed rate ISA (6.15%) that allows transfers in is either the Birmingham Midshires, which is postal, or Nationwide BS which is branch based.

As these are "fixed term" accounts (another name for bonds, just to confuse!) the Nationwide has an "early access charge" if you want to withdraw before the term is up. You will need to chase them for what exactly that is. For the BM account it is 90 days' loss of interest.

This is one of the features of bonds / term accounts, the penalties of withdrawing before the term ends. I get round this by having money in easy access accounts, e.g. ICICI's HiSave account (6.16%) for any money that I may need to get at during the year. Plus there is the limit of how much you can put into an ISA each year so the rest has to go somewhere.

If you do want a fixed ISA with transfers in and no penalty transfers out then Northern Rock and Standard Life Bank are offering 6.0%

You just need to decide what is more important to your personal situation.

Dear Wanderlustg

Thanks for your help. Do you know of any fixed rate ISAs paying a good rate of interest, which take and allow transfers without penalties???

BIG EXPECTATIONS - E

Hi you

Thanks so much for your help

Eileen

forumfan made an over site when he said a bond is taxable.

A normal bond is taxable, like any other savings account.
An ISA bond is not taxable like any other ISA account.
An example of an ISA Bond is Nationwide's 1 Year Fixed Rate ISA Bond (6.15%)

A bond is simply a fixed interest financial asset issued by governments, companies, banks, public utilities and other large entities. Bonds pay the bearer a fixed amount a specified end date.It can be wrapped in an ISA, like a normal cash savings

The easiest way to think of a bond is a fixed rate savings account that has a set life span. At the end of the bond term you need to find a new account for the savings, whether that be a new bond or a different savings account.
You then get fixed rate accounts, that do not have a set life span, and the normal variable rate accounts.

Hope that makes it more understandable!

The Tax Beater, which was withdrawn May 2007, is paying a measly 5.31% variable. Icesave is paying 6.1 % variable.

The best fixed rate ISA at 6.25% is Bradford and Bingley. You can open one with them for this year, but unfortunately they do not accept transfers in.

Bank of Scotland's fixed rate ISA is 6.20% and accepts transfers in, but you have to leave it for four years, so it's like a bond, really.

Birmingham Midshire ISA at 6.15 fixed accepts transfers in and just requires you to leave it for a year.

An ISA is tax-free (i.e. the advertised rate is what you get) but a bond is taxable - you lose 20% on the advertised rate.

Hope this helps.

,

Hi

Could you help a totally inexperienced ISA customer. I have two ISAs presently: a Barclays Tax Beater Cash ISA opened 30 March 2007, and an Icesave Easy Access ISA opened January 2008.

My first question is should I move either to a different provider and, more to the point, can I.

The second question is which ISA should I choose for this tax year - I think in the present financial circumstances a fixed rate would be better than a bonus 1% offer on a variable rate. I was also considering a fixed rate bond but have no idea how these work and if they would be a useful vehicle for my savings. I have several easy access accounts at the moment, ie, ICICI but was thinking of the new Kap (something) bank which seems to offer the best rate at the moment.

Ta in advance

I've had bad experiences with Abbey but I've not dealt with A&L and I probably wouldn't because I've been put off by the way that they advertise some of their products. Personally I would prefer to see a slightly lower interest rate on the posters in the window and deal with someone that I trust.

Hi Dave,

A&L? My thoughts.

Yes it is a variable account. 6.25% that includes a 1.00% bonus payable to 31 May 2009. So yes it could follow the base rate down; and it will go down in June 2009.

Their website was good for internet banking, I had no problems with that.
Customer Service was okay, they answered my questions when I rang them.
My biggest complaint was that the rate "went down",and it was actually after only around four months, not a year.
Have a look at the interest rates on their closed accounts. You can see that they have over half a dozen old ISA accounts
http://www.alliance-leicester.co.uk/savings/index.asp?page=closed-rates

I put the "went down" in quotes as it was relative. When the interest rates went up if I remember correctly they didn't raise the interest rate on my account but closed it and started a new account with the higher rate. This meant if you casually glanced at the interest rates you thought you were getting a good rate, but it was only after close examination of your account number did I realise that I was missing out.

Thus my main advice for anyone with an A&L account is to check explicitly once a month what the rate on your actually account is, as you may find your not getting what you thought you were.

I moved eventually last year as YBS had a similar rate and I didn't need to constantly track the buggers!
I moved this year to LloydsTSB fixed rate as it was 0.95% better and I don't need to monitor it at all as it's fixed. All I need to do is look for a new home for it come next March/April

Good luck!

Hi, this is the original poster back, I still haven't made up my mind yet, but thanks for the advice everyone. I'm still thinking A&L is best, I can't see any downsides except it could take longer than I'd hope to transfer money from my Natwest current account. Also the fact it is variable rate, so it might go down as the base rate goes down, is that right?

wanderlustg, how did you find A&L for the time you had an account with them? Good website for internet banking, good customer service, any complaints about anything? I'm guessing you only moved from them because the rate went down after a year.

Cheers

Dave

A&L, and most providers actually, have this in the small print, that it could take up to 30 days. When I moved my money from A&L last year the letter I sent was 18 April, the account was actually closed on 26 April and it was credited into the new YBS account on 2 May. So the money was not in an account for 6 days. Since you have to allow 2 to 4 days for a BACS transfer anyway, I wouldn't unduly worry. I think the up to 30 days is more to do with the fact that they have to process the letters by hand and could be sitting in a pile for a few days, especially if they are inundated. And since A&L have a habit doing headline rates for only a year, I can see why people would change after the year is up!

Hi,

Having similar thoughts but have noticed a possible problem with A & L.

If next year you transfer into another provider although it appears there is no penalty they say in the small print that such a transfer would be by cheque and to allow up to 30 days for it to be sent!

i.e A months lost interest.!

Take care

Hi

Browsing for mini cash ISA and noticed today that Barclays offer 6.50% on their instant access Tax Haven ISA with 1% bonus on first anniversary.

However, care needed - their Cash ISA with variable rates for long-standing old-style ISAs ( probably now converted to cash) offers considerably less interest.

Hope this is of interest (no pun intended)

Reluctant saver