22 Dec 2024

Don’t let your old ISA mislead you

More and more headline grabbing ISAs are being launched, with many attractive introductory bonuses to draw you in – which is excellent news but only for this season.

Not one ISA with an introductory bonus extends the bonus rate past the initial first year.

Many ISAs retain the product name for several years and, apart from rate, the only thing to distinguish the difference is the series number.

Many people think their money is working for them because they recognise the name of a leading ISA as the one they have invested in.

It may have the same name but if they opened it a year ago or longer, they may be in for a disappointment.

Sylvia Waycot, spokesperson for Moneyfacts.co.uk, commented:

“Interest paid in the second or subsequent year of an ISA that had an introductory bonus can be a very sad imitation of the original attention grabbing rate because, without the bonus element to prop it up, the remaining rate paid can be very low.”

“Pitfalls to watch out for are long standing account names as they will be issue based and each issue will pay a different rate; the older the account generally means the worse the rate.”

“To add further confusion, some accounts are not issue led but date led, so you can have three people opening accounts with the same name in different weeks all getting different rates regardless of the account to all intent and purpose being the same.”

“It is not enough to make sure you are getting the best rate when you open an account, you need to check it is still the best every year.”

CASH ISAs
Provider	Account	%Gross	Notes
first direct	Cash e-ISA	2.72	Current issue: Rate drops to 0.20% from 31.8.12
first direct	Cash e-ISA	2.47	Previous issue: Rate drops to 0.20% from 30.6.12
first direct	Cash e-ISA	2.62	Previous issue: Rate drops to 0.20% from 31.10.11
first direct	Cash e-ISA	2.72	Previous issue: Rate drops to 0.20% from 31.8.11
first direct	Cash e-ISA	2.47	Previous issue: Rate drops to 0.20% from 30.6.11
Nationwide BS	e-ISA	3.10	Current issue: Accounts opened from 1.2.11 Rate drops to 1.75% from 31.7.12
Nationwide BS	e-ISA	2.80	Previous issue: Accounts opened from 10.12.10 Rate drops to 1.75% from 31.12.11
Nationwide BS	e-ISA	2.75	Previous issue: Accounts prior to 10.12.10 Rate drops to 1.75% from 30.6.11
Santander	Flexible ISA Issue 3	3.30	Current issue: Rate drops to 0.50% 12 months from opening
Santander	Flexible ISA Issue 2	3.20	Previous issue: Accounts opened 6.4.10 -3.10.10 Rate drops to 0.50% 12 months from opening
Santander	Flexible ISA Issue 1	3.50	Previous issue: Accounts opened 22.2.10 -5.4.10 Rate drops to 0.50% 12 months from opening
Source: Moneyfacts.co.uk 15.3.11

Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry.

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