Product Spotlight: Online 12-month fixed ISAs
The end of the tax year is approaching, and if you’ve yet to use your ISA allowance, we’ve uncovered the top 12-month ISAs that don’t have opening restrictions and can be opened online.
• Al Rayan Bank takes the top spot with the 12-month Fixed Term Deposit Cash ISA paying a market-leading expected profit rate of 0.65% AER quarterly. This Sharia-compliant account requires a minimum investment of £1,000, with further additions permitted within 30 days of account opening and transfers in welcome. No withdrawals will be possible before the end of the term, though transfers out are allowed, subject to a reduced profit rate being paid for up to 90 days. The account can be opened online, via app, by phone or in branch, before becoming postal-operated too.
• Next up among accounts that aren’t loyalty-based is Leeds Building Society, with 1 Year Fixed Rate ISA (Issue 146) paying 0.50% AER on maturity (3 April 2022). It requires a minimum investment of £100 and accepts transfers in, as well as further additions until 31 March for the 2020/21 tax year. Earlier access is possible, subject to 60 days’ loss of interest, with the same penalty applying to transfers away. This account can be opened online, in branch or by post, before becoming branch and postal-operated.
• Completing this overview is Cynergy Bank, which pays a rate of 0.50% AER on its 12-month Fixed Rate Cash ISA. It requires a minimum investment of £500 and permits transfers of previous cash ISAs, with further additions of at least £100 welcome (though these will be paid at a variable rate). Withdrawals aren’t possible but earlier access is, subject to 180 days’ loss of interest, the same penalty as applies to transfers away. The account must be opened online, after which it can be managed by post and phone as well. A loyalty version is also available to existing customers that pays a higher rate of 0.55% AER on its anniversary.
You can find more of the best 12-month ISAs by heading straight to our chart.
Product Spotlight: 65% LTV mortgages
Moving home and need a new mortgage? Here are the top deals available at up to 65% loan-to-value (LTV).
• Virgin Money tops the charts with a rate of 1.35% (3.1% APRC) fixed to 1 May 2026 before reverting to 4.34% variable for 22 months and then 4.09% variable for term. It has a product fee of £1,495, but the incentive of £300 cashback helps offset it, and it permits overpayments and payment holidays too. Alternatively, for those who wouldn’t mind paying a slightly higher rate for a lower product fee, Virgin Money also has a deal of 1.39% (3.1% APRC) with the same term, revert rate and cashback incentive, but with a fee of £995.
• Next up is Barclays with a rate of 1.49% (2.5% APRC) fixed to 31 May 2028, before reverting to 3.59% variable for term. It has a product fee of £749 and permits overpayments, with an incentive package that includes free valuation for all borrowers, while remortgagors can get free legal fees or £250 cashback too.
• Reliance Bank is next with a rate of 1.59% (3.1% APRC) fixed to 31 May 2026 before reverting to 4% variable for term. It has a fee of £1,495 and permits overpayments, but its incentive of free valuation is only available to remortgagors. Alternatively, those looking for a high street name might want to consider Leeds Building Society with a fixed rate that’s just slightly higher at 1.60% (3.9% APRC) to 31 May 2026 before reverting to 5.29% variable. The fee is £1,999 and it permits overpayments, and its offer of free valuation is open to all borrowers (though remortgagors also get additional help towards costs).
ISA rates at record low – is it time to switch to stocks & shares?
Latest figures from Moneyfacts reveal that ISA rates have fallen to the lowest on record, which will be disappointing for savers who may have hoped that ISA season would have reinvigorated the market. Instead, with the average easy access ISA rate at a paltry 0.24% and the long-term rate little better at 0.60%, many could be looking to alternatives – and transferring to a stocks & shares ISA could be on their radar.
Stocks & shares ISAs can offer the chance for greater returns, the downside being that those returns aren’t guaranteed, and savers could end up with less than they put in. That said, some providers (such as Unity Mutual) offer capital protection on certain products, while others (such as interactive investor) offer thousands of funds to choose from, giving savers complete control over their money. Investment platforms like this one from ii can also offer a convenient way to invest. Find out more about ISA transfers to see if it’s worth considering.
First-time buyer market sees strong start to 2021
The number of mortgage deals available to those with a 10% deposit has increased by 117 since the start of the year, with 15 more providers offering 90% LTV deals, giving first-time buyers some positive news after many were locked out of the mortgage market in 2020. “This means that there is far greater choice for would-be buyers in this area of the market,” said Eleanor Williams, finance expert at Moneyfacts.co.uk.
“There are of course still hurdles for these borrowers to overcome, but their options have been steadily increasing, [and] there is hope that 2021 may see more potential home-buyers take that first step onto the ladder.” Yet it isn’t always easy to find the right option, which is where a mortgage broker can come in. They’ll be able to provide advice and support in choosing the right deal, and will often help with the application process, too. Speak to a broker today.
Equity release or pension drawdown – which is best for you?
The pandemic has resulted in many households facing financial struggles over the past 12 months, and older homeowners may be considering tapping into their pension pot early or releasing equity from their property to see them, or help loved ones, through the current economic uncertainty.
Although accessing pensions (via pension drawdown) or releasing equity from homes through equity release can be a good way to access wealth that has accumulated over lifetimes, both options can have a long-term impact on finances and need to be considered carefully before a decision is made. Ideally, those considering pension drawdown or equity release should speak to an independent financial adviser to discuss their individual financial goals, but as a start we’ve looked at the pros and cons of both equity release and pension drawdown.
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