Money Insider: Barclays weighs in with another decent ISA deal
Saturday 13 March 2010
With a little over three weeks of the current tax year remaining, the new ISA deals are coming thick and fast, although most are offering returns that hardly warrant a mention.
The best of the tax-free savings accounts to appear on the shelves this week came from Barclays in the form of its Golden ISA 2, paying a healthy 3.1 per cent AER. This is the fourth year running that Barclays have offered one of the top-paying instant access variable rate ISAs, however as with the table-topping 3.5 per cent Santander deal, it doesn't offer the facility to transfer in previous years' accumulated ISA balances.
It may be that providers are conscious that offering a combination of a market-leading interest rate and ability to transfer could result in a deluge of applications in a short timeframe which could lead to less than acceptable service levels.
The problem is that even though you can make same-day transfers when transacting online, the method of switching ISA balances from one provider to another is very basic.
Rules from HMRC state that monies must be transferred from the original ISA provider to the new ISA account within 30 calendar days. However due to cost implications, providers don't have an automated process set up by which to facilitate these transfers, and unbelievably in this day and age, the process is very much a manual one.
A customer will approach their new ISA provider and complete a transfer request, which is submitted to the bank/building society where their existing ISA is; that provider then arranges for the account to be closed and a cheque posted to the new bank for the balance.
Because most of the ISA activity is compressed into such a small window of activity, this archaic system becomes even slower, with a rush of applicants chasing best-buy rates, but with insufficient resource provided by the banks, the manual systems are unable to cope with the level of demand.
It is astonishing that much of the ISA transfer process is still completed by hand; unfortunately it's another example of banks putting cost considerations before the needs of customers.
The real downside for savers is that because of these hold-ups they are losing interest. For example, if you had a £3,600 balance, 30 days at say 3 per cent would see you losing £8.87 in interest, but if you had the maximum ISA balance of £43,200 the delay in switching funds will cost a staggering £106.52.
Northern Rock boosts bond rates now 100% guarantee is gone
Following the recent announcement that the 100 per cent state guarantee on Northern Rock savings balances would end on 24 May, it was interesting to see the bank increasing rates on its one- and two-year fixed rate bonds.
Whilst variable rate savers are still fully protected until 24 May and existing fixed rate accounts until maturity, any new fixed rate accounts do not come with this added level of comfort.
The one-year bond now offers the fourth highest rate in that particular category following a hefty 0.4 per cent increase from 2.75 per cent to 3.15 per cent. The two-year bond, which is not quite as competitive, also saw a sizeable increase from 3.2 per cent to 3.5 per cent.
With the removal of the savings guarantee for new deposits, it's not all together surprising to see these substantial rate increases from Northern Rock at a time when a number of short-term fixed rates have been cut or withdrawn completely.
With new fixed rate deposits no longer eligible for the 100 per cent guarantee, the bank now has to compete on a level playing field, and will need to fight for business with competitive rates if it is to retain and grow its savings market share.
It will be interesting to see whether these rate increases will be sufficient to entice customers to remain loyal to Northern Rock with the lesser safety net of £50,000 courtesy of the FSCS, in line with the rest of the savings market.
Rates for savers of all types are still being eroded, and this week saw the Barclays Monthly Savings account interest rate cut by 1 per cent to 3.25 per cent AER, while the best buy "in credit" current accounts from Alliance & Leicester and Santander saw their 12-month introductory interest rates drop from 6 per cent AER to 5 per cent AER on the first £2,500. They are both still market leaders, however if you always keep your current account in the black and can pay in at least £1,000 per month, the Reward account from Halifax, paying £5 net each month, is beginning to look an attractive longer-term alternative.
Andrew Hagger is a money analyst at Moneynet.co.uk
Women born in 1950s facing severe financial hardship over pensions could have fates changed by Ros Altmann - should she choose to help
Is it really that bad in the bond market?
Five Questions On: GB Energy's new tariff
Simon Read: You're guilty until proven innocent when HMRC sends in the tax credit detectives
Money roundup video: Warning for mortgage borrowers and Premium Bonds boost
- 1 'Cheeky' Nando's under fire for apparently coming onto a customer on Twitter
- 2 Playboy model April Summers speaks out about being a victim of revenge porn
- 3 There is something wrong but very right about this Bible illustration
- 4 iPhone 'effective power' text: how to be safe from iOS bug that lets people crash your phone
- 5 Man jumps into bear pen at zoo, fights bear and loses
EU referendum: David Cameron's rules are a 'democratic disgrace', says French-born Scottish politician set to be denied a vote
British tourists complain that impoverished boat migrants are making holidays 'awkward' in Kos
SNP fury as HS2 finds 'no business case' for taking fast train service to Scotland
A nation of inequality: How the UK is failing to feed its most vulnerable people
Australian man punched in the face for defending Muslim women from abuse on train
David Starkey 'tells Amal Clooney to shut up and stop over-promoting human rights'
iJobs Money & Business
£30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...
£20000 - £25000 per annum + OTE £45K YR1: SThree: At SThree, we like to be dif...
£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...
£55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...
Day In a Page
This four-bedroom Edwardian home offers a combination of original features and contemporary design after a renovation by the current owners.
In the pretty market town of Bungay, this grade II-listed Mill House is arranged over four floors, offering four bedrooms and three reception areas.
This four-bedroom home offers a vaulted ceiling in a breakfast room that's ideal for summer entertaining with doors that open to the patio and garden.
On the market for the first time in more than 50 years, this six-bedroom home is a project with vast potential - spread over three floors of living space.
This five-bedroom home comes with a range of outbuildings including a large barn which could be converted into a self-contained granny-flat or rental.
Surrounded by rolling countryside, this four-bedroom barn conversion comes with a self-contained, one-bedroom annexe that could serve as an office or a holiday let.
Located near Harrogate town centre, this five-bedroom Victorian terrace is arranged over three storeys while a current study serves as an optional sixth bedroom.
A ground-floor flat in a country house, located a mile from Sway; this two-bedroom home would make an ideal weekend retreat on the edge of the New Forest.
On a popular residential lane in Caterham on the Hill, this four-bedroom family home offers a secluded garden and a convenient location for local schools and public transport.
Just a short walk from Westerham green, this three-bedroom cottage has a light kitchen with exposed brickwork and double doors that lead to a south-facing garden.
In a prime spot opposite the River Thames, this one-bedroom flat has an 18sq ft reception room with glass doors that open out to a private terrace.
Set in the hills above Llanwrda Village, west Wales, this 18th-century three-bedroom farmhouse has holiday-let potential from a separate barn conversion and annexe.
This charming end-of-terrace townhouse is arranged over three floors, with two double bedrooms and a private courtyard garden located at the rear of the property.
Located in the University area, this semi-detached five-bedroom home is arranged over three floors - there's even a rear garden and off-road parking too.
Only a few minutes' drive from the charming town of Marlow, this two-bedroom home sits on the private riverside estate of Harleyford.
This detached four-bedroom home in Middleyard is arranged over two floors, with features that include a wood-burning stove and bespoke oak staircase.
In a row of eight detached Georgian residences, this five-bedroom home offers views of The Sound, Mount Edgcumbe and Cornwall from its impressive veranda and full-length balcony.
If you love cooking for friends this two-bedroom flat - complete with views of the iconic Battersea Power Station and an open-plan kitchen/dining area - will go down a treat.
Located above Grasmere village, this five-bedroom home is arranged over three floors and offers countryside views across Grasmere Lake towards Silver Howe.
Surrounded by the Western fells, this five-bedroom Georgian home retains many original features including panel-plastered ceilings, sash windows and fireplaces.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B, subject to change of use permissions.
A former period coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, office, kennels and an outbuilding that's currently used as a gym.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This four-bedroom detached home comes with a double carport, useful workshop, garden and two walkways that offer views of the adjacent countryside.
With space for an equestrian business, a greenhouse for growing your own veg, a wine store and a gym; this five-bedroom home has all the ingredients for a country retreat.
The decked roof terrace of this two-bedroom flat is perfect for summer drinks while large windows and ample storage space make for a light and spacious interior.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
Surrounded by approximately 15 acres of grounds, this six-bedroom grade II-listed home has been extensively refurbished yet retains many period features.
This four-bedroom home comes with a two-bedroom cottage and commercial office, with planning to extend, in a stunning courtyard setting.
In a pretty Norfolk village, this four-bedroom family home is surrounded by landscaped gardens, with even a self-contained annex for guests.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
This five-bedroom home is arranged over three floors of a converted Victorian hospital, offering spectacular views of the Pentland Hills - only three miles from the city centre.
This four-bedroom detached home comes with grounds that span to approximately 2.5 acres, as well as two large patio areas and a double garage.
This four-bedroom cottage is a Grade II-listed town house, well-located for the thriving market town of Nailsworth.
A four-bedroom apartment on the ground floor of a stunning period property in North Yorkshire, with two kitchens and a large south-west facing garden.
This high-spec two-bedroom home is part of a smart collection of new flats at Beaufort Park and has a large decked balcony that's perfect for summer drinks.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Overlooking a golf course, this six-bedroom Edwardian detached home spans four storeys and retains many period features including the original, operational servants' bells...
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
In a Grade II-listed manor just outside of Bath, this three-bedroom home is arranged on two floors with a skylight in a vaulted roof line.
Open the living room's bi-fold wooden doors to reveal a retro-style kitchen, and a conservatory leading to a paved garden at this three-bedroom home.
A Grade II-listed, four-bedroom home, in a charming Somerset village, with a two-storey studio that could be converted into a holiday cottage
A modern four-bedroom Victorian home, within walking distance to the high street
A luxury apartment in the Gothic mansion of Wyfold Court in Kingwood, offers six bedrooms spread over three floors and a turret
This school conversion, near Stockwell Tube, oozes New York loft style. The one-bedroom flat features double height ceilings and exposed brick work
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool