Tuesday, 26 April 2011

Check your ISA rates

Stay still or he'll see you
If you've watched Jurassic Park then you know that avoiding sudden movements can be just as important as running fast. This week I've had that lesson play out in real life.

I've been hunting around for the last couple of weeks looking for a new cash ISA as I was pretty sure that Natwest were ripping me off. With inflation running at somewhere between 4 to 5% at the moment (if you believe the stated figures, personally it feels more like 10%), you've got to do all you can to protect your hard-earned emergency fund.

Anyway, I used the usual comparison sites like moneysupermarket.com and the others to hunt out a bargain. Even went on that charlatan Martin Lewis' site, who I'm not going to link to as he doesn't need any more business, but wasn't able to find much.

My criteria for a cash isa is:
 - no lock in
 - monthly interest (IMPORTANT - I want to see my money growing and compounding all the time).
 - transfers in
 - no fixed rate - there's only one way interest rates are going and that is up. Fixing now is madness.
 - no bonus, initial period rate - I want the most they are going to give me forever.
 - managed online

Right, there were bugger all options with those criteria. I think Barclays had an account for 3% but with restrictions and everyone else had 2.25-2.5%.

As it is though, Natwest are running two rates with their E-ISA depending on when you opened it. If you opened on or before 14 May 2009 (like I did), you get a higher rate and a even higher one applies if you put more money in to pass a balance of £10,000. So rather than move things around and face all the drama of Natwest forgetting to move things or the new provider not quite understanding what I want, I've decided to stay put, pop some extra money in that has come my way courtesy of HMRC and reap the benefits of a tiny bit more interest - 3.01%.

Moral of the story - do nothing, stand still and watch the pennies roll in.