Cash ISA - Move or not to move?

NorthSeaKing · 17 November 2017 at 1:33PM

I currently have a cash ISA with Paragon Bank paying 1% on around 42k. I am not likely to need this money in the near future and next year will be looking at saving around 7-8k.

I am considering moving 40k into a 1 yr fixed rate bond paying 1.95%. This seems to make sense now but long term i aren't sure! Obviously i am trying to maximise the return on my money asap. Thoughts?

jimjames · 17 November 2017 at 1:53PM

Do you know when you might need the money? If it's not for 5+ years then it may make sense to invest some of it in a S&S ISA rather than cash if you have sufficient cash available for emergencies

fun4everyone · 17 November 2017 at 2:04PM

Listen to jimjames OP.

NorthSeaKing · 18 November 2017 at 9:33AM

It is unlikely that I would need the money in the next 5 years based on my current situation. I have been looking into S&S ISA' s and the Route To Fidelity listed on MSE looks a good option for me to start. Bearing in mind I will be drip feeding money into savings each month would the smart move be to move the whole amount into S&S now or a partial amount and keep the rest in cash savings?

jimjames · 18 November 2017 at 6:53PM

If it's your only money then I wouldn't put it all into S&S ISA, some cash is essential for an emergency fund and ongoing expenses. Whether it's £20k or £10k really depends on your needs and risk attitude as S&S can go down as well as up over the short term but that's balanced out by investing monthly as you buy more if the markets are down.