Maturing ISA What to do next?

BB78 · 23 July 2016 at 2:19PM

When did banking become this confusing??
I need a little help please, I've got a cash ISA maturing today (yep should've done something about it way before now but it's been a hectic few weeks) I've read the ISA, regular saver, best bank account guides but am still totally confused by what to do next.

Say I've got £4,000 in the maturing ISA and another £1,000 to add to this, I already save £50 per month (in an account paying pittance) and can continue doing so (but into a better account). I am a basic rate tax payer & can't see me earning over £1,000 in interest so how do I now maximise the interest on my savings?

I'm not eligible for the top paying bank accounts and don't really want to switch so can't drip feed the £5,000 into a regular saver account, I can get a HSBC Regular Saver account paying 4% interest but it has a limit of £3,000, is that the maximum you can have in the account or the maximum you can save over 12 months?

Or is my only option to transfer to a new ISA for the lump sum (looking at Virgin's One Year Fixed ISA 1.3%) and a HSBC Regular Saver at 4% for the £50pm?

I've got no debts to pay off, I'm not a first buyer and don't have kids. I am happy to lock the money away for 12 months and basically just want to make the most of my little nest egg.
I understand if people can't give specific advise i.e. this account or this ISA, I just want to know what I should be looking for because I've never been this confused about banking in all my life. Thank you.

badger09 · 23 July 2016 at 2:23PM

Current accounts and regular savers are where you will make most interest on the sort of amount you're talking about.

Why do you say you're not eligible for the top paying bank accounts?

Do you realise that you can have more than one current account?

Who do you bank with at the moment?

If you give a bit more info, we'll try to help:)

BB78 · 23 July 2016 at 2:33PM

I can't meet or guarantee paying in the minimum monthly deposits required for the top paying current accounts plus I don't really want to change my main current account.
I have 2 current accounts (just bank accounts not Premier or Advanced) and a savings account (instant access I believe) with HSBC, a savings account with Tesco and the maturing ISA with Virgin.

(Just to note -after bad experiences in the past I refuse to ever use the Halifax or Nationwide again.)

badger09 · 23 July 2016 at 3:11PM

BB78 wrote: »

I can't meet or guarantee paying in the minimum monthly deposits required for the top paying current accounts plus I don't really want to change my main current account.

Of course you can! You may not be able to meet minimum monthly deposits from salary/pension, but that isn't necessary.

The highest minimum monthly deposit I'm aware of is HSBC Advance @ £1750. You have £5000 in savings and what's more, minimum monthly deposits can go in and out again;)

BB78 wrote: »

.....plus I don't really want to change my main current account.
I have 2 current accounts (just bank accounts not Premier or Advanced) and a savings account (instant access I believe) with HSBC,

You don't have to change your main current account.

Do you need 2 current accounts with HSBC?

BB78 wrote: »

I have 2 current accounts (just bank accounts not Premier or Advanced) and a savings account (instant access I believe) with HSBC, a savings account with Tesco and the maturing ISA with Virgin.

(Just to note -after bad experiences in the past I refuse to ever use the Halifax or Nationwide again.)

As you are eligible for the HSBC Reg saver @ 4%, I would start with that. You can pay in up to £300 per month. When it matures after 12 months, you will be able to open a new one (assuming T&Cs stay the same)

As you are ruling out Nationwide & Halifax - your choice:cool: - have a look at TSB Classic Plus 5% up to £2k, £500 min monthly deposit.

Next, either Club Lloyds 4% up to £5k, £1500 min monthly deposit, or as you are already a customer, a couple of Tesco current accounts 3% up to £3k and no minimum monthly deposit.

Please read the T&Cs before applying for any of the above accounts as I've only mentioned the min monthly deposit requirements.

BB78 · 23 July 2016 at 4:22PM

Thanks for your reply badger09 which I'm going to come back to but I've just noticed if I don't tell Virgin what to do with my ISA by 6pm they will transfer it to an E access ISA, should I be telling them to transfer it to my E-saver account with them (so that's another account I've got) or one of my accounts until I work out what I'm doing?
If they open an E access ISA I take it that counts as my ISA for the year or doesn't it matter? If my understanding is correct it doesn't really matter where the money goes anymore I'll just be missing out on interest until I sort myself out? They don't back date tax on interest up until April when I stopped paying it do they?

Vortigern · 23 July 2016 at 4:47PM

You can allow Virgin to transfer you to the E ISA, but don't allow them to transfer it to a fixed term ISA, or you'll be stuck with low interest for another year or longer.

You are talking about old (last year's) ISA money. This does not affect your current year's allowance.

Don't be rushed, take your time to decide.

I think a Tesco current account or two might suit your present needs.

badger09 · 23 July 2016 at 4:56PM

BB78 wrote: »

Thanks for your reply badger09 which I'm going to come back to but I've just noticed if I don't tell Virgin what to do with my ISA by 6pm they will transfer it to an E access ISA, should I be telling them to transfer it to my E-saver account with them (so that's another account I've got) or one of my accounts until I work out what I'm doing?
If they open an E access ISA I take it that counts as my ISA for the year or doesn't it matter? If my understanding is correct it doesn't really matter where the money goes anymore I'll just be missing out on interest until I sort myself out? They don't back date tax on interest up until April when I stopped paying it do they?

Don't panic! Assuming this is the one

http://uk.virginmoney.com/savings/find/virgin_easy_access_cash_e_isa_issue_16/overview/

just let them go ahead while you decide what to do.

With the amount you have in savings, you can forget about cash ISAs as they are simply not worth it.

There will be no question of any 'back dated tax' and you are not going to earn anything like £1000 in interest on your £5k.

Once you've decided which current accounts (and/or regular savers) the only difference will be that you'll be earning 3% - 5% tax free, instead of around 1%:T

You didn't answer my question about your 2nd HSBC account. You could use it to bag a switching bonus;)

BB78 · 23 July 2016 at 5:22PM

Thanks guys so I don't need to panic about contacting Virgin right this second and can concentrate on fixing the back gate before the sun disappears & the rain returns.

It's a 2 year fixed rate E-ISA Issue 83 that's maturing but they'll open this ISA instead: http://http://uk.virginmoney.com/savings/pdf/E_Access_ISA_Issue_1-key_product_info.pdf

Worse interest rate but as far as I can see it doesn't lock me in at all.
I hope not at least, I can't believe my head is spinning with all this, bank accounts/savings used to be so simple.

badger09 wrote: »

Don't panic! Assuming this is the one

http://uk.virginmoney.com/savings/find/virgin_easy_access_cash_e_isa_issue_16/overview/

You didn't answer my question about your 2nd HSBC account. You could use it to bag a switching bonus;)

Haven't answered your question because I was in a panic about Virgin and I now think I've been doing my banking all wrong and perhaps need to start again, I think you'll tell me I've been missing a trick & can be much more money savvy. But first the garden gate & my grumbling stomach are demanding my attention.

Thanks for your help so far & like Arnie once said "I'll be back."

xylophone · 23 July 2016 at 11:29PM

A very simple ( but not the most profitable) answer.

If you have a total of £5000, you could simply open a couple of Tesco current accounts and deposit £3000 in one (A) and £2000 in the other (B).

Move the monthly interest from A to B each month until you have £3000 in B.

Then think about opening an account to which you can move the monthly interest arising on A and B.

colsten · 24 July 2016 at 11:18AM

xylophone wrote: »

A very simple ( but not the most profitable) answer.

If you have a total of £5000, you could simply open a couple of Tesco current accounts and deposit £3000 in one (A) and £2000 in the other (B).

Move the monthly interest from A to B each month until you have £3000 in B.

Then think about opening an account to which you can move the monthly interest arising on A and B.

That's really over-complicating it unnecessarily. A much simpler option would be to put £2,500 into each of the two Tesco current accounts. There is then no need to move anything at all each month, and on the current interest rate it will take over 6 years before there's £3,000 in each of the accounts.

But as you say, 2 Tesco accounts isn't the most profitable approach for saving £5,000.

Maturing ISA What to do next?

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