I'm surprised this hasn't been mentioned much on the forum.

Have already set up an NS&I for 07/08 allowance, and about to transfer my existing ISA to get a better rate.

Anyway, the spec:-


balance £9,000+ 5.75%

Includes variable rate bonus, currently equal to 0.50% gross p.a. which is payable until 1 May 2008. Rates are guaranteed to match any increase in the Bank of England base rate until 1 May 2008.


So as long as i remember to review it next year, seems like a good bet.

But if anyone knows any pitfalls then please shout before I sign on the dotted line....

cheers!

I went for one of these. If you believe interest rates are heading up, they're a best buy. Currently the .5% bonus means you'll earn 5.75% but if they go up in May by .25%, the rate will be 6% which is just .1% lower than the guaranteed ISA from Scarborough BS. All this and easy access too...

I've dealt with Abbey and had their direct ISA product on and off for 2 issues now. They're generally hassle free...

So you can transfer an existing ISA into the Abbey ISA without using up the 2007/8 allowance?

I have now gone for this one. As mentioned, I put my full 07/08 allowance into NS&I.

That created a slight problem in that I wasn't able to open the Abbey one online, and I had to go
into my local branch to do it. But yes, you can transfer your previous years' savings.

And they're talking about 6% IRs with an upward trend by the end of the year on BBC as I type

Ive gone with NSandi this year and having some of that 5.8% ;p You cant transfer into NSandi though

No, but the difference in IRs is negligible (just £5 per £10000 of savings if you have >9k). Both will increase
the same with the base rate and you can transfer into Abbey.

It's a variable bonus, meaning that if the BoE put up rates by 0.5% next week, Abbey could just put their rates by 0.1% if they wanted. I've got an Abbey Postal ISA, which was market beating at the time (2 years ago) but has sadly lagged way behind in passing on IR rises.

That's not how I understood it Prof... and if it's true then I think I've been done!

Quoting from the website:-

Includes variable rate bonus, currently equal to 0.50% gross p.a. which is payable until 1 May 2008. Rates are guaranteed to match any increase in the Bank of England base rate until 1 May 2008.

I think I see what you're saying - that if base rates rise then abbey would match that, but could just reduce the variable bonus.

Or in fact just reduce the variable bonus even if base rates don't rise.