M&S Money 4% ISA

A question about : M&S Money 4% ISA

The M&S 3 year fix ISA at 4% looks rather good for those with larger transfers in as there is only a Ј100 penalty for closing the account, ie 1 months loss of interest if you put in Ј30,000. (I presume transferring out is closing the account).

Anyone have any experience with M&S Money? Any reason why I shouldn't move both my and my wife's ISAs here? - we have Ј30,000 each.

Best answers:

• The only downside to this account is the fact that interest rates will probably rise in the 3 year timescale.
  However for your amount, the penalty is relatively small.
  I'm taking my chances with FD at 3% for 12 months which has no penalty.
  It all boils down to what you think you'll get elsewhere in 2011 and 2012.
• I figure that I'd need to wait until there was an ISA offering 4.5% which isn't a long term fix with the usual 180+ loss of interest before needing to move from this M&S offering.
• So do you think a base rate rise from 0.5% to 2% is not likely?
  It's really difficult to know what to do for the best.
  If you go to M&S then there is an advantage that you don't have to xfer next year whereas FD moves to 0.2%.
  However from a base of 0.5% I think it's entirely possible for rates to go up reasonably quickly.
  I don't mean to 10% or 15% or anything silly like that.
  But 3%, 4% or even 5% is quite conceivable.
  I also think that margins on both mortgages and savings will come down.
  I really don't know to be honest, that's why I've stuck with the less risky option that I can retreat from at no cost.
  Not sure you will get much more help on future interest rates, because at the end of the day it's a gamble. May as well discuss the lottery numbers or who will win the grand national.
  But as you say your risk is limited to one months interest, so if things move against you, then you can xfer.
  Don't forget also that you lose some days on xfer due to postage, but FD has to be xfered next years anyway.
• You do not have to transfer all of your existing cash ISA funds to a new provider. You can transfer part of the money. Thus you can consider splitting your existing money between between multi year fixed rates and those that are instant access/penalty free and variable.
  I transferred part of a cash ISA to a fixed ISA within the same provider. I thought it was worth hedging the risk and having a mixture of fixed and variable.
  There are often a lot of restrictions surrounding transfers in that rule out a lot of potential deals.
  J_B.
• I've emailed them twice over the last few weeks asking whether transfers out are allowed under the Ј100 fee, and apparently 'the Savings and Investment department will be in touch'. They haven't been. I want to get this in writing before committing myself to anything.
  I put the numbers into my spreadsheet about whether it's better to go for the Manchester BS account at 4.51% with a 90 day interest penalty. The Manchester account including fee takes 9 months to beat the current highest rate of 3%. The M&S account, for amounts of Ј5K, 10K, 20K, 30K and 40K, including fee breaks even at 23, 11,6, 5 and 4 months respectively.
• Seems that Manchester BS account paying 4.51% has already been withdrawn.
  I rang M&S Money today and was told transfers out are definitely allowed under the Ј100 fee. When I asked if she was sure, with no hesitation she told me she was 400% sure. I also took the liberty of recording the conversation just in case.
• Thanks Porcupine,
  I rang them them previously and they confirmed transfers out are OK subject to the fee but nice to see it written.
  They pay interest right up to the closure or transfer.
  I like this one for the straight fee.
• Principality are paying 4.2% for 3 years.
  https://www.principality.co.uk/default.aspx?page=1563
• Think the OP is attracted by the M&S escape option.
• I've been staring at the Ts&Cs a bit more and spotted this:
  Quote:
• I got an answer:
  Quote:
• I think I'm happy with it, but I'll give telephone banking a miss