Barclays Tax Haven Isa

[Disillusioned]

6.50% which includes a 1% bonus for 12 months.

This is all well and good but, unlike the other variable rates I've been looking at, there is no information about how the rate is pegged to the BoE base rate. Normally you are told that it will be 0.25% above for the next 12 months or something (plus the bonus).

I've been to a branch to ask about this and they didn't know( ), so I spoke with someone on the phone and they told me there was no guarantee to stay (say) 0.25% above the base rate. Apparently this has been the case for previous ISAs too.

It’s not a big deal because you can always move to a new ISA provider if they dramatically reduce the rate, but I thought I should spread the word.

[Muskoka]

Appreciate that. I was looking to go into Barclays for 08/08 Isa. Maybe not then

[Ologhai Jones]

The bonus rate of 6.5% is guaranteed for 12 months, yes?

So you're just interested to know what will happen after the 12 month period is up?

[Disillusioned]

The bonus rate of 6.5% is guaranteed for 12 months, yes?

So you're just interested to know what will happen after the 12 month period is up?

IIRC, it actually guarantees a bonus of 1% for 12 months. So I guess your rate would drop by 1% (from whatever it was) at the end of the 12 months.

[grey shark]

6.50% which includes a 1% bonus for 12 months.

This is all well and good but, unlike the other variable rates I've been looking at, there is no information about how the rate is pegged to the BoE base rate. Normally you are told that it will be 0.25% above for the next 12 months or something (plus the bonus).

The 1% bonus is GUARANTEED , the 5.5% it's attached to is VARIABLE they can change it as and when they feel like it .

http://www.personal.barclays.co.uk/BRC1/js...lf&site=pfs

I'm not doing it anyway , i think Barclays are crap in everyway

[Ologhai Jones]

Thanks for your views. Certainly if I were to stick some money into this ISA, I'd be asking Barclays exactly what it is they're guaranteeing for 12 months...

[Disillusioned]

The 1% bonus is GUARANTEED , the 5.5% it's attached to is VARIABLE they can change it as and when they feel like it .

http://www.personal.barclays.co.uk/BRC1/js...lf&site=pfs

I'm not doing it anyway , i think Barclays are crap in everyway

That's what I'm saying: You get a nice 1% bonus, but it's on a rate that they are perfectly within their rights to reduce to (say) 4%.

[grey shark]

That's what I'm saying: You get a nice 1% bonus, but it's on a rate that they are perfectly within their rights to reduce to (say) 4%.

I know what your saying , so we agree , isn't it just fantastic .......Barclays products are crap imo anyway .

IF you took this out i reckon it's a near certainty that in 12 months time when the bonus is finished you would be dropped to a poor rate , you would then have to go through the hassle of transfering it to another provider because of the NEW poor rate , if that be the case then you would of put £3,600 in there for a year to earn about a tenner extra .

Is it worth it ........NO .

[Ologhai Jones]

IF you took this out i reckon it's a near certainty that in 12 months time when the bonus is finished you would be dropped to a poor rate

I don't think one needs to be all that perceptive to know it's highly likely this is what will happen. I wouldn't imagine Barclays (or any other bank that plays the same game, of which -- I imagine -- there are many) are even trying to pretend otherwise.

It's a bonus rate of interest. You know it. They know it. They know you know it... etc.

, you would then have to go through the hassle of transfering it to another provider because of the NEW poor rate , if that be the case then you would of put £3,600 in there for a year to earn about a tenner extra .

Is it worth it ........NO .

The goal should surely be to always try to have your cash (whether it be ISA or regular taxed accounts) earning as high an interest rate as possible, no? There may be an argument for avoiding 'risky' banks in order to pursue, say, an extra half a percent here or there, but I suspect most people wouldn't consider Barclays to be an especially risky bank.

Assuming that seeking out the extra half a percent here and there is a way of life (e.g. let's say one might intend to find the best interest rates for the next 20 years or more), then to dismiss it as being a waste of time (presumably on the basis that half a percent of £3k is only £15) is to ignore the effects of (potentially) a lifetime's worth of compounding on all these extra half percents, for example:

£3k @ 6.0% for 20 years is £9621.

£3k @ 6.5% for 20 years is £10571.

Personally, given that my intention is to keep an eye on financial products anyway (unless, of course, I become simply too wealthy to care! ), then it would seem wasteful NOT to be prepared to move money around to take advantage of the best offers out there -- now and in the future.

[grey shark]

I don't think one needs to be all that perceptive to know it's highly likely this is what will happen. I wouldn't imagine Barclays (or any other bank that plays the same game, of which -- I imagine -- there are many) are even trying to pretend otherwise.

It's a bonus rate of interest. You know it. They know it. They know you know it... etc.

The goal should surely be to always try to have your cash (whether it be ISA or regular taxed accounts) earning as high an interest rate as possible, no? There may be an argument for avoiding 'risky' banks in order to pursue, say, an extra half a percent here or there, but I suspect most people wouldn't consider Barclays to be an especially risky bank.

Assuming that seeking out the extra half a percent here and there is a way of life (e.g. let's say one might intend to find the best interest rates for the next 20 years or more), then to dismiss it as being a waste of time (presumably on the basis that half a percent of £3k is only £15) is to ignore the effects of (potentially) a lifetime's worth of compounding on all these extra half percents, for example:

£3k @ 6.0% for 20 years is £9621.

£3k @ 6.5% for 20 years is £10571.

Personally, given that my intention is to keep an eye on financial products anyway (unless, of course, I become simply too wealthy to care! ), then it would seem wasteful NOT to be prepared to move money around to take advantage of the best offers out there -- now and in the future.

OJ , thanx for the lecture , it's not like i didn't know any of it , all basic stuff that i expect everyone else who frequents this board already knows as well , still if it makes you feel happy just carry on .........

[Ologhai Jones]

I know what your saying , so we agree , isn't it just fantastic .......Barclays products are crap imo anyway .

IF you took this out i reckon it's a near certainty that in 12 months time when the bonus is finished you would be dropped to a poor rate , you would then have to go through the hassle of transfering it to another provider because of the NEW poor rate , if that be the case then you would of put £3,600 in there for a year to earn about a tenner extra .

Is it worth it ........NO .

OJ , thanx for the lecture , it's not like i didn't know any of it , all basic stuff that i expect everyone else who frequents this board already knows as well , still if it makes you feel happy just carry on .........

My apologies if I've patronised you, but, with all due respect, if it's all so blindingly obvious to you, why say things about earning an extra tenner that make it sound like you don't have a clue?

Perhaps as 'Barclays products are crap' (apparently) you could recommend a better ISA and suggest why it isn't crap in the way that the Barclays one is?

[Number86]

I just signed up for this yesterday. *

I feel stupid

*Well when I say signed, I mean I phoned them up.

[Disillusioned]

My apologies if I've patronised you, but, with all due respect, if it's all so blindingly obvious to you, why say things about earning an extra tenner that make it sound like you don't have a clue?

Perhaps as 'Barclays products are crap' (apparently) you could recommend a better ISA and suggest why it isn't crap in the way that the Barclays one is?

How about the Lloyds fixed ISA?

[Ologhai Jones]

How about the Lloyds fixed ISA?

I agree. That looks like a good one -- once again subject to a 12-month bonus period, after which the interest rate becomes decidedly ordinary again.

One downside to Lloyds FRISA is that for the rate to be good, it requires a minimum of £9k. They do allow transfers in, though, so £9k may not be all that hard for some, but if someone can't transfer in, then there's no way to make the £9k.

[Number86]

I'm new to the whole ISA game. Can anyone tell me. Does transferring money from one ISA to another constitute paying your limit.

I.e. if I shift from one ISA to another am I still able to add another 3k the same tax year?

Edited March 27, 2008 by Number86

[Ologhai Jones]

I'm new to the whole ISA game. Can anyone tell me. Does transferring money from one ISA to another constitute paying your limit.

I.e. if I shift from one ISA to another am I still able to add another 3k the same tax year?

Moving ISA money around doesn't increase your allowance, which is just a certain amount per tax year. (For the '07/'08 tax year, that amount happens to be £3k. Next year, it's £3.6k.)

I believe that you can only use up the current year's allowance with a single institution, i.e. all of the £3k (or however much you use this year) must reside in a single ISA product. The allowance from previous years, though, can be split and transferred (or kept together and transferred) freely.

Once money is withdrawn from an ISA, that amount of your ISA allowance is lost for good. Transferring between ISAs doesn't cause your allowance to be lost, but it must be done 'properly', i.e. withdrawing cash from a previous year's ISA to pay into a new ISA won't work.

Edited March 27, 2008 by Ologhai Jones

[Number86]

Once money is withdrawn from an ISA, that amount of your ISA allowance is lost for good. Transferring between ISAs doesn't cause your allowance to be lost, but it must be done 'properly', i.e. withdrawing cash from a previous year's ISA to pay into a new ISA won't work.

This bit is confusing me!

If you withdraw, it's lost for good. Then you say transferring between ISA doesn't lose your allownce, then you say withdrawing from a previous year's ISA won't work.

The scenario I had in my head was:

I invest in the Tax Haven ISA(which i've done already). I stick another 3.6k in on April 5th/6th 2008 then when the rate goes to pot and I've already had my interest at the end of the year, I switch this amount (now 6.6k) into another ISA. Can I then on April 6th 2009 stick another 3.6k into this newly invested ISA?

Thanks for your help!

[Disillusioned]

This bit is confusing me!

If you withdraw, it's lost for good. Then you say transferring between ISA doesn't lose your allownce, then you say withdrawing from a previous year's ISA won't work.

The scenario I had in my head was:

I invest in the Tax Haven ISA(which i've done already). I stick another 3.6k in on April 5th/6th 2008 then when the rate goes to pot and I've already had my interest at the end of the year, I switch this amount (now 6.6k) into another ISA. Can I then on April 6th 2009 stick another 3.6k into this newly invested ISA?

Thanks for your help!

You're exaclty right. You can move your ISA amount from previous years to a new ISA (whatever it is) and they remain in the tax-free domain. Once you are in the April '09 tax-year, you can put in another £3,600. It's important to choose an accont that allows you to make these transfers from previous years. Some ISAs only allow you to invest the current year's amount.

I hope that makes sense.

[Ologhai Jones]

Once money is withdrawn from an ISA, that amount of your ISA allowance is lost for good. Transferring between ISAs doesn't cause your allowance to be lost, but it must be done 'properly', i.e. withdrawing cash from a previous year's ISA to pay into a new ISA won't work.

Sorry, I did try to be clear!

As I said, if you withdraw (NOT transfer) money from an ISA, that amount of your ISA allowance (from whatever year) is lost for good.

Transferring IS allowed (although you'll find some ISAs won't allow it -- like Barclays Tax Haven ISA, for instance[1]), but there's more to transferring than simply withdrawing the money and taking it to some other bank. Instead you'll have to complete an appropriate ISA transfer form.

Hopefully, that's made it clearer...

The scenario I had in my head was:

I invest in the Tax Haven ISA(which i've done already). I stick another 3.6k in on April 5th/6th 2008 then when the rate goes to pot and I've already had my interest at the end of the year, I switch this amount (now 6.6k) into another ISA. Can I then on April 6th 2009 stick another 3.6k into this newly invested ISA?

As Disillusioned said, yes... assuming that 3.6k is still allowed in 2009/10, which I guess everyone would expect it to be.

EDIT: [1] Bah, I've just seen a potential ambiguity here! When I say Barclays don't allow transfers with their Tax Haven ISA, I mean they don't allow transfers INTO that ISA from previous years. They will, of course, allow you to transfer OUT of it at a later date... Whew!

Edited March 28, 2008 by Ologhai Jones

[Number86]

I think that's pretty much cleared it up

One more little niggle. When transferring the balance next year should I be transferring that at the very start of the 2009 financial year or the very end of 2008?

Thanks again chaps

[Ologhai Jones]

I think that's pretty much cleared it up

One more little niggle. When transferring the balance next year should I be transferring that at the very start of the 2009 financial year or the very end of 2008?

Thanks again chaps

All you're trying to achieve is the best interest rate for your money.

So, any time you find somewhere better for the money, transfer it[1]! I guess the likelihood of finding something better increases after the bonus 12 months is up and the interest rate drops to a non-bonus level.

In other words, transfer it if and when you find something better.

[1] With the caveat that some ISAs (especially the ones with bonus rates it seems) may have some penalty clause if you withdraw or transfer within the bonus period. I don't know whether this it the case with this Barclays ISA, but obviously when working out whether you've found some better interest rate, you'd need to take any penalties into account.