Cash ISA Rate Changes - and how to beat them!

[StuartO]

We had Nationwide Web ISA Issue 2 accounts, which Nationwide recently annouced would drop the interest rate on 31st August to only 0.5%. It was time to shop around again.

 

Because we want instant access the expedient better option was another, newer Nationwide Cash ISA called an Instant ISA Saver, which pays 1.5% and will take tranfered ISA money. Needless to say nationwide don't make it obvious how to move the money but it is actually quite simple, as follows:

 

Opening one of these new accounts can be done on line and if you already operate internet banking with Nationwide just look up your existing Web ISA Account then select "Transfer internal ISA funds" from the list on the left. The website will pre-fill some of the stuff in for you so it's easy. Choose "Instant Saver ISA" and open the new account by transferring £1 from one of your other Nationwide accounts. (You might be able to transfer from your Web ISA but I missed that.)

 

The new account takes a couple of days to appear on yoru internet banking screen but once it does, transferring the funds from your olf Web ISA is dead easy. From the "Overview of Accounts" page use the "Quick Transfer" box on the left and move the money over, all in one go. I left £1 in the web ISA account just to keep it open because interest will be added to that account on 31st August, so close it after that has happened.

 

 

[Colin Leake]

Does that 1.5% include a limited introductory factor or is it ongoing. We used to be forever switching Nation Wide accounts but of late they seem to have settled down around the 1.25 to 1.5 percent. A long way from the days when 5 to 4.5% was the norm. Fortunately we still manage to eat but these low rates have taken one hell of a lot of dosh out of our pockets much of,which was tax free.

[StuartO]

The drop in interest rate on the Wb ISA account was when a "temporary bonus" expired and since the banks all seem to be pulling tricks of one sort or another I didn't even bother to look at whether the Instant Saver ISA rate involves a bonus or other temporary boost. I just read the letter announcing the reduction and shopped around for the best substitute account without too much hassle changing over.