savings help

gotmaintvtr · 4 November 2009 at 7:08AM

hi i have an isa with the abbey had it for a few years now but use the money each year usualy. at the moment i have a bit of money in there but just looked up on their website and it says the interest rate is 0.10% AER

that is pretty poor right? would i be better off taking the money out closing the account down and putting it elsewhere?

please help thank you

Baldur · 4 November 2009 at 7:32AM

Are you a taxpayer?

If you remove the funds from the Cash ISA, you will lose the ongoing tax-free interest that your ISA funds currently have.

You can transfer your ISA to a new provider that accepts ISA transfers and pays a better rate by simply completing the new provider's ISA transfer form and letting them arrange the transfer (which should take around 30 days). This method keeps the tax-free status of your ISA.

Read through this post, which gives current Cash ISA 'best buys'.

For example, transferring your Abbey ISA to the First Direct e-ISA would give you a fixed rate of 3% until next November and easy access to your funds, if required. Taking your funds out of the Abbey ISA would mean that you would need to find a non-ISA savings account that paid 3.75% AER to give you 3% after basic rate tax has been deducted.

gotmaintvtr · 4 November 2009 at 4:30PM

thanks for the reply. yes im a tax payer i pay the higher rate tax if that makes a difference. ill have a look at that other account thanks

Baldur · 4 November 2009 at 4:45PM

gotmaintvtr wrote: »

...yes im a tax payer i pay the higher rate tax if that makes a difference.

The difference it makes is that you'd need to find a non-ISA account offering 5% AER in order to achieve 3% net of tax at 40%.

savings help

Comments

Confirm your email address to Create Threads and Reply

🚀 Getting Started

Categories

Is this how you want to be seen?

Get our FREE Weekly email full of deals & guides - and it’s spam-free