Nationwide ISA Bond fixed for two years at 5.85%: or
Bradford & Bingley 6.15% fixed for one year and then transfers to variable rate.
Inclination is to fix for two years because looking at LIBOR+3, +6 and +12 suggests that rates will rise in the medium term, but then start to drop again in about 12~18 months time. So, by the time my first 12 months are up, I'll be lucky to get an ISA at perhaps 5.25~5.5%? What do other people think?
Most agree rates will likely rise and fall, but I doubt they'll manage to rise and then fall back beneath current levels so darn quickly that locking in at 5.85% is beneficial.
My best bet is Northern Rock 6.01% fixed for 1year (60 day access penalty) penalty free access in April08. In April08 I'll re-evaluate.
PS I discard Bradford & Bingley (and Barclays TaxBeater etc) as they don't allow transfer-ins. If you're only talking about 3000 then go for Barclays.
I disregarded Barclays because although the promise a 1% bonus on their rate, the actual rate is variable so might go down (quite a lot, knowing Barclays) in the next 12 months.
I've opted for Barclays because if they drop the rate excessively during the year, and base rates rise as expected resulting in better rates elsewhere I'll transfer it then.
BTW why are many best buy tables in the press quoting the Barclays rate as
6.31% whereas the AER (which is what you get at the end of the first year) is 6.5%? They seem to have missed that the interest is credited to the account monthly. Or have I missed something?
That said, all the best cash ISA products explicitly exclude transfers in.
Reestit Mutton
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