5 YR FIXED 5.0% (GROSS) AER ISA from NEWCASTLE BUILDING SOCIETY - HotUKDeals
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Thank me later, best deal out, 5% AER fixed ISA for 5 years (through July 2014)!
Minimum investment £1, further details via the link.

Expiry unknown but limited issue.

Thanks to my brother Luke for flagging this up!

EDIT: Lot of debate on this but basically the gamble is will interest rates be on average over 5% in the next 5 yrs for ISAs?

Highly unlikely there will be an exaggerated climb of the BofE base rate over the next two years anyway and 1yr ISA's are currently only returning around 2% for the main part.

You are not legally obliged to keep your money in for 5 yrs if you see a better opportunity elsewhere, of course. Personally I think the security and the nice rate make it a worthwhile proposal for those with a small amount to tuck away. *jfojut*
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7y, 5m agoFound 7 years, 5 months ago
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#1
Not great if inflation rockets in the next 1-2 years. Deals of 4.5% are available over 2 years which might be a better bet in the long run.
#2
No way would I tie my money up for 5 years at a mere 5%.
Sorry but cold.
#3
Not cold at all, its the rate that is fixed not the investment period.

If you read the Ts & Cs you would see that it clearly states "Withdrawals can be made subject to 90 days notice. Withdrawal requests must be made in writing. "

So its a 3 month fix at most.
#4
COLD.. 5 yrs.. No WAY!!:whistling:
#5
celticbull2008
COLD.. 5 yrs.. No WAY!!:whistling:


Yawn, read the Ts & Cs.
#6
fyi, 5% compound interest over 5 years equates to 27.63% growth on your original capital.

e.g. If you put in £1000 then it would be worth £1276.28 at the end of 5 years. This seems like quite a good guaranteed rate.

Might be useful to find out when interest payments are made. i.e. is it monthly, twice yearly or annually? My Intelligent Finance ISA is paid every month, which is great. It's rate of return, however, is not!
#7
thekanester


Might be useful to find out when interest payments are made. i.e. is it monthly, twice yearly or annually? My Intelligent Finance ISA is paid every month, which is great. It's rate of return, however, is not!


Yearly on July 31st. I think this is a good deal at the moment, it allows transfers in from other providers, is the highest rate deal and only has a 3 month tie in, but if interest rates don't go up significantly over the next couple of years then you can stay in.
#8
Seems a great deal and the best rate around. The 5 year fix seems a win-win situation - you get this high rate now and for up to 5 years if you want it and the interest rates do not rise. If interest rates rise then you move the funds - with just 90 days notice and no loss of interest. This has a really hot financial deal.
#9
centaurandrew
Yearly on July 31st. I think this is a good deal at the moment, it allows transfers in from other providers, is the highest rate deal and only has a 3 month tie in, but if interest rates don't go up significantly over the next couple of years then you can stay in.


what is meant by Access By Post, following maturity.
does that mean that you can not access funds before maturity.
#10
orthopod
what is meant by Access By Post, following maturity.
does that mean that you can not access funds before maturity.


Yes - very good question. It might be that you can withdraw but are unable to transfer - rate tarts like me would want to do this, of course. I would not want to wait until maturity if a significantly better rate comes along.

EDIT: I think CentaurAndrew is mistaken. Just checked the terms and conditions, and it seems that you are expected to keep the account for the full 5 years. You can withdraw funds, but there is no mention of transferring to another ISA provider (as I would do if the rates elsewhere are better) - withdrawing funds means you cannot reinvest as a tax free ISA. So if you invest funds that you want to keep for a long term investment with a good rate, I would suggest this is not the best account as interest rates are expected to rise in line with an expected rise in inflation. The rate is excellent right now - but look back just one year to see how the rates have changed dramatically. I would guess similar dramatic increases in rates are on the cards within 2 years - a 5 year lock in is no good to me. So, although I voted hot - I believe it should have been cold for me.
#11
Can anybody tell me (in VERY simple English) what or where the best investment of £1000 plus £50 per month would be?
#12
In my opinion it's worth a punt if you are only tying up some of your savings.
For someone with say 30k to invest could do worse than putting their full allowance in this (£3800 I think)
Don't forget it's tax free too, equating to over 9% for higher rate tax payers and about 6.5% for everyone else
#13
inflation will go up in 18 months, not worth it. 3 years would be acceptable.
#14
londislagerhound
In my opinion it's worth a punt if you are only tying up some of your savings.
For someone with say 30k to invest could do worse than putting their full allowance in this (£3800 I think)
Don't forget it's tax free too, equating to over 9% for higher rate tax payers and about 6.5% for everyone else


Allowance this year for cash ISA is £3600, not £3800

Mr Calculator will confirm that it actually equates to a taxed interest rate of 8.33% for a higher rate tax payer and 6.25% for a basic rate tax payer.

5% for 5 years is good for somebody who doesn't believe those who forecast a significant increase in inflation a couple of years down the road. I do believe them.
#15
gobofraggle
This doesn't sound like a serious answer but it is one: The best advice I read in response to a question like this, the best investment opportunity for a small amount of cash, is that you should focus on non-perishable consumer goods in half price offers.
If you can buy non-perishable goods (tinned food, pasta sauces, toilet paper, soap, shampoo, etc.) in 2 for 1 or half-price offers and buy each in quantities you can practically use over months, you are effectively increasing your purchasing power equivalent to a 100% return on your money.

For larger amounts of money, this clearly isn't practical, but for smaller amounts, nothing can beat it.


Couldn't agree more with Gobo. This is the tactic that I have been using since the economy really took a dive. You should see the shed.. more 241 cat food and cleaning products than you can shake. Good old tesco codes come in handy too (they are doing 10 first shop and then cashback on top so everyone in the house has an account except the cat.) when it comes to stocking the larder! If you have space adn a few bob then stock up.
#16
Gobo and Jim, thank you.
Certainly something I had never thought of and a possibility given that I've just cleared the loft...
Or I might just blow the lot on mods for my car...:thinking:

However, let's just say that I did want to give my hard-earned readies to a fat man in a fat suit sat at a fat desk, which deal is best on a savings account or similar? (Possibly towards my sons trust fund)
#17
gobofraggle
Allowance this year for cash ISA is £3600, not £3800

Mr Calculator will confirm that it actually equates to a taxed interest rate of 8.33% for a higher rate tax payer and 6.25% for a basic rate tax payer.

5% for 5 years is good for somebody who doesn't believe those who forecast a significant increase in inflation a couple of years down the road. I do believe them.


Yes, well I was only doing a bit of rough maths and couldn't be bothered to look up the actual figures.

Nobody knows what inflation is going to do, and anyone who say's otherwise is wrong.

As I stated, this is a punt. In my case £3.6k represents a relatively small proportion of my savings, and I'm happy to fix this sum at this rate.
#18
All the nay-sayers could do with a reality check imo.
Why do they think 5% guaranteed is poor for a cautious saver in the current climate?

Approximately 2% for most banks standard 12mth ISAs right now.

Economic growth is slowed and BofE base rate is unlikely to shoot up to the 8% or so that it would need to within 5yrs time to make a string of 1yr ISAs a better proposal.

Each to their own!
#19
Everybodys requirements are different, go to Moneyfacts and do a search for your own particular savings requirement.
#20
mrcoxexcel

EDIT: I think CentaurAndrew is mistaken. Just checked the terms and conditions, and it seems that you are expected to keep the account for the full 5 years. You can withdraw funds, but there is no mention of transferring to another ISA provider (as I would do if the rates elsewhere are better) - withdrawing funds means you cannot reinvest as a tax free ISA.


I don't think they can stop you transferring to another provider... can anyone confirm?

Edit: Found this "Investors can transfer their ISAs from one manager to another whenever they want."

Source: http://www.hmrc.gov.uk/isa/transfer-isa.htm

This should mean transfers away from Newcastle BS are fine as long as they don't have any large penalties...
#21
Mr Tea
I don't think they can stop you transferring to another provider... can anyone confirm?

Edit: Found this "Investors can transfer their ISAs from one manager to another whenever they want."

Source: http://www.hmrc.gov.uk/isa/transfer-isa.htm

This should mean transfers away from Newcastle BS are fine as long as they don't have any large penalties...


Can anyone give me a hand looking in t[ penalty's that they may have in place if you do decide to transfer. This is looking like a very good deal. I am considering transfering my ISA in to this but would want to be able to transfer out without pnealty if a better deal comes along. I think the other thing I'd would like to know and others too is would you lose the interest if you transfered out before the investment matures?
#22
minifish33
Can anybody tell me (in VERY simple English) what or where the best investment of £1000 plus £50 per month would be?


If you want a savings account, then probably one of the 'regular saver' ones (e.g. Barclays @ 6% gross whilst no withdrawals are made). Maximum paying-in is usually £250/month so you'd need to split the £1000 over the 1st 4 months. Most of these type of accounts only last a year though, then change to an ordinary savings account with low interest, so you'd need to open another such account annually if you're continuing saving.

With regard to the original ISA, 5% will probably be a decent rate for the next couple of years or so, but when the economic recovery (eventually) starts, then unless the government/BOE manage to claw back all their QE 'printed' money quickly, then inflation (and hence interest rates) could get a lot higher than 5% by the end of the 5 years.
banned#23
im angry with the banks! Did you guys see the news that if they lose the court case with charges on overdraft. They will no longer give free current account. Would you prefer they charge crazy amount on your overdraft or service using current account? its unfair for people who do not do overdraft
#24
thi year i asked for the newcastle building society to transfere my isa to the abbey it took 5 weeks once they get your money they do not want to part with it.
#25
Trickster
If you want a savings account, then probably one of the 'regular saver' ones (e.g. Barclays @ 6% gross whilst no withdrawals are made). Maximum paying-in is usually £250/month so you'd need to split the £1000 over the 1st 4 months. Most of these type of accounts only last a year though, then change to an ordinary savings account with low interest, so you'd need to open another such account annually if you're continuing saving.

With regard to the original ISA, 5% will probably be a decent rate for the next couple of years or so, but when the economic recovery (eventually) starts, then unless the government/BOE manage to claw back all their QE 'printed' money quickly, then inflation (and hence interest rates) could get a lot higher than 5% by the end of the 5 years.


A LOT higher?

Doubt it, they weren't a lot higher before the infamous credit crunch.

And as explained, they would need to be a LOT higher to aggregate out the terrible rates offered generally just now over the 5yr period. In any case, remember you're starting from 2% for inflation (general ISA rates), not 5% as offered by this deal, so a lot further to go!
#26
JIM1973ANDREWS
Can anyone give me a hand looking in t[ penalty's that they may have in place if you do decide to transfer. This is looking like a very good deal. I am considering transfering my ISA in to this but would want to be able to transfer out without pnealty if a better deal comes along. I think the other thing I'd would like to know and others too is would you lose the interest if you transfered out before the investment matures?


I can't find any information in the T&C about not being able to transfer out and I would imagine that they can't stop this, HOWEVER I recently transferred an ISA which (like this) had a notice period and it is a real pain because you have to give them notice (in this case 90 days) they then give you a small period (a week in my case) in which the transfer must occur.
This is all well and good if the transfer happens in that period but I would imagine in most cases it wouldn't without a few telephone calls to push it through.
As I say in my case I was on 180day notice period but the interest rate was 1% and I was transferring to a 5% account so I took the hit and lost 180days of interest but I then gained at the other end.
#27
alien123
im angry with the banks! Did you guys see the news that if they lose the court case with charges on overdraft. They will no longer give free current account. Would you prefer they charge crazy amount on your overdraft or service using current account? its unfair for people who do not do overdraft


I totally agree. I don't want to get into an argument (because I know what will happen :thumbsup:) but I maintain my current account with a positive balance so why should I pay for the others that couldn't.
Granted that the costs incurred was high but if you use an unauthorised overdraft then you are using money that isn't yours.

As I say I don't wish to get into arguments so please don't respond to this message.
#28
Sorry but Trickster is bang on the money, so to speak........if you nail interest rates to the floor and print money as these bozos have, then the only thing that follows (rapidly) is inflation. It is a concern in the City at the moment as well..As sure as night follows day interest rates will be dragged up to try to choke it off. World Oil and commodity prices are ever upward and this adds to the pressure. Most building socities and banks have in the last 2 weeks jacked their mortgage rates up for new buyers and savings rates are edging upwards every week.

For those who think that their present low mortgages are going to stay for a few years, dream on baby but start saving every penny you can..you`ll need it......I can see a mortgage rate of around 6% in 2 years...

In the meantime this deal is not bad and worth a serious look
#29
JIM1973ANDREWS;5580891
Can anyone give me a hand looking in t[ penalty's that they may have in place if you do decide to transfer. This is looking like a very good deal. I am considering transfering my ISA in to this but would want to be able to transfer out without pnealty if a better deal comes along. I think the other thing I'd would like to know and others too is would you lose the interest if you transfered out before the investment matures?
Have a look here : http://forums.moneysavingexpert.com/showthread.html?t=1769557

A few people have emailed regarding transfers OUT.
#30
[SIZE="7"]Do NOT put money into this bank.

My friend's father did put money into it a few years back, and the bank never returned it to him.

had to take it to court to settle the matter.


DO NOT PUT money in.[/SIZE]
#31
Thanks. This is certainly looking like a good deal so far. Haven't voted yet. Still fact finding. I'll see if I can get a full T &C from them if I remember tomorrow regarding tansfering out and possible losses or penalties.

Had a look on Money savings expert main savings page but no mention (I may have missed it) of this deal...
#32
Thanks thepearce

I will see what i can see
#33
Given how low current interest rates are the only way is up. I would hate to have a lump sum earning "only" 5% in a few years time when interest rates are sky high because the much anticipated inflation is raging out of control.

Look back at the eighties when we had double digit bank base rates - 1989 had a rate of 15% - this was some years after a discredited labour government was kicked out of power after appalling mismanagement and getting the country badly into debt. Sounds familiar? I'll stick with a one year fix elsewhere and so be able to move my money.
#34
Good at today's rates but professional advice is not to commit beyond 2 years. Chances are rates will rise significantly.
#35
Good:

Don't shout!
It's not a bank, it's a BS.
You're covered to £50K anyway.
Some dubious old story about one father of a friend is not a good basis for investment decisions!
#36
Nellster;5579795
inflation will go up in 18 months, not worth it. 3 years would be acceptable.

I like your crystal ball.. can I borrow it?


....
#37
TinoP
I like your crystal ball.. can I borrow it?


....


Just read the financial pages of newspapers.
#38
mrcoxexcel
Just read the financial pages of newspapers.


Better still don't.

They have no more idea than anyone else.
#39
So what happens if they went bust?
Would you get the 5% interest on the money you invested?
I'd hate to just get back my original investment.
#40
mrcoxexcel

EDIT: I think CentaurAndrew is mistaken. Just checked the terms and conditions, and it seems that you are expected to keep the account for the full 5 years. You can withdraw funds, but there is no mention of transferring to another ISA provider (as I would do if the rates elsewhere are better) - withdrawing funds means you cannot reinvest as a tax free ISA. So if you invest funds that you want to keep for a long term investment with a good rate, I would suggest this is not the best account as interest rates are expected to rise in line with an expected rise in inflation. .


No I'm not mistaken, and if you'd done any research you would have found this on the moneysaving expert site:

I sent an online query to the Newcastle BS this morning regarding transfers and the status of the ISA at maturity.

This is the email I just got from them:

Thank you for your recent enquiry.

During the term of the Newcastle Five Yea ISA, if you wish to transfer to another provider, this is possible providing you supply the society with 90 days notice.

If you keep the money invested for the full five years, and you move onto the maturity account, the maturity account will remain an ISA so as not to effect your tax free savings. You will be given the option to transfer or withdraw funds on maturity penalty free.

If you have any further queries please contact us on 0845 606 5522, our opening hours are 8am-8pm Monday - Thursday, 8am - 6.30pm Friday, 9am-5pm Saturday.

So transfers can be made provided you give 90-days notice. At maturity the account will remain an ISA.


Although this post was probably made after you posted yours, so i will let you off lol

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