Cash ISAs: The Best Currently Available List

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  • Perhaps an update needed on page 1 for Santander Direct ISA - says operable via internet but you can't get money out of your ISA to an external bank account, which a lot of people, me included, only discover when trying to get at their money, they won't even transfer over the telephone if it is 'over a certain amount'. I would not recommend.........
  • Kazza242
    Kazza242 Posts: 2,167
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    MissNobody wrote: »
    Perhaps an update needed on page 1 for Santander Direct ISA - says operable via internet but you can't get money out of your ISA to an external bank account, which a lot of people, me included, only discover when trying to get at their money, they won't even transfer over the telephone if it is 'over a certain amount'. I would not recommend.........

    The information provided by Santander regarding the Direct ISA states that it can be operated online.
    How do I manage my account?

    You can manage your account online, by phone...

    See their Direct ISA (PDF) factsheet here and on the Direct ISA webpage here.

    I had to speak to the Santander ISAs team today about my Flexible ISA, during the call, I asked them if it was possible to transfer funds out of the Direct ISA (issue 6) to an external bank account. The advisor said that it was possible to do this - you just need to set it up as a "bill payment" several days in advance of the payment date. He said that the 'Money Movements' team can set this up for you and they would allow you to transfer up to £5K on a given day. If you needed to transfer more, they would put you through to another team who would handle this for you.

    I found out during the call that the information on the Santander website regarding managing the account online appears to apply to people who have a Santander current account. It's a bit like Barclays' in that respect. Though, Santander do not make this clear on their website.

    Before applying for an ISA, it is really important to ask the pertinent questions that relate to how you intend to use the account. Some ISA providers don't always provide this information on their website, so you do need to check with them before making your application.

    I will add a section to the Notes for this ISA that states that you need to hold a Santander current account to make withdrawals online. If you have a Santander current account you can transfer funds to your current account and then transfer them to an external account if you wish. Savers who don't have a Santander current account can arrange withdrawals to an external account by contacting the Santander ISAs department.
    Please call me 'Kazza'.
  • MissNobody
    MissNobody Posts: 146 Forumite
    edited 23 August 2010 at 9:23AM
    Hi Kazza

    I wasn't critising your excellent and useful thread. Santander could make things clearer and point out that you need their current account to operate the account on-line, I did read extensively before opening the account (on line) and never came across it, thanks for clarifying the situation.......:)
  • Spiggle
    Spiggle Posts: 1,787
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    Hi All,

    I'm just looking through a number of savings accounts for a friend. She has quite a substantial amount to save and has never :eek: used her ISA allowance.

    Having persuaded her to re-examine where she puts her money (she really is not interested in looking for best deals on a regular basis and has in my opinion lost hundreds and probably thousands in interest over recent years by 'sticking with what she knows' i.e. taking whatever her bank sold her!). She is not in the least concerned about fixing rates and is quite happy to lock money away for 3 or 5 years.

    So, I've sorted out a lot of best options for her but need a bit of your experience and advice on what to do for her on the ISA front. (She is not at all interested in a S&S ISA.)

    My first preference for her was to deposit £5100 straight away into the index linked account NCBS ISA for 5 years. Which means she's got this year's allowance invested and I'd check out the best option for her next April. I'd also need to suss out the best place to deposit various other monies now.

    However, I've just come across the Principality ISA Builder Account which gives the option of depositing £15,300 (3 yr fix 3.8% AER) or £25,500 (5 yr fix 4.2% AER) now. This would mean she would know where her money was, she wouldn't need to shop around for 3 or 5 years for ISAs and the value of total investment would not be above the single institution assurance (£50k). Obviously she would pay tax on the Builder bond part of the interest.

    This appears a good deal to me for someone like my friend who really can't be bothered to look around at deals and things. (rolls eyes skywards)

    I have looked through the first page list and can't see anything that would better these options but I may be looking too simplistically at it!

    She will be taking out other products such as a regular saver on top. But I'm just concerned as to which is the best to advise her to go for in ISA terms immediately.

    What is you opinion on the pros and cons of each of the above options please? Would you recommend a different option (NOT S&S)?

    Thanks in advance for any and all advice.

    Spigs
    Mortgage Free October 2013 :T
  • boobbby
    boobbby Posts: 769 Forumite
    Spiggle wrote: »
    Hi All,

    I'm just looking through a number of savings accounts for a friend. She has quite a substantial amount to save and has never :eek: used her ISA allowance.

    Having persuaded her to re-examine where she puts her money (she really is not interested in looking for best deals on a regular basis and has in my opinion lost hundreds and probably thousands in interest over recent years by 'sticking with what she knows' i.e. taking whatever her bank sold her!). She is not in the least concerned about fixing rates and is quite happy to lock money away for 3 or 5 years.

    So, I've sorted out a lot of best options for her but need a bit of your experience and advice on what to do for her on the ISA front. (She is not at all interested in a S&S ISA.)

    My first preference for her was to deposit £5100 straight away into the index linked account NCBS ISA for 5 years. Which means she's got this year's allowance invested and I'd check out the best option for her next April. I'd also need to suss out the best place to deposit various other monies now.

    However, I've just come across the Principality ISA Builder Account which gives the option of depositing £15,300 (3 yr fix 3.8% AER) or £25,500 (5 yr fix 4.2% AER) now. This would mean she would know where her money was, she wouldn't need to shop around for 3 or 5 years for ISAs and the value of total investment would not be above the single institution assurance (£50k). Obviously she would pay tax on the Builder bond part of the interest.

    This appears a good deal to me for someone like my friend who really can't be bothered to look around at deals and things. (rolls eyes skywards)

    I have looked through the first page list and can't see anything that would better these options but I may be looking too simplistically at it!

    She will be taking out other products such as a regular saver on top. But I'm just concerned as to which is the best to advise her to go for in ISA terms immediately.

    What is you opinion on the pros and cons of each of the above options please? Would you recommend a different option (NOT S&S)?

    Thanks in advance for any and all advice.

    Spigs

    If you are sure she does not want access to her money and cant be bothered to shop about the 3 year plan with principality looks ideal.
  • MarkyMarkD
    MarkyMarkD Posts: 9,912
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    The Principality product doesn't quite make sense.

    If they are genuinely seeking to maximise your tax-free interest, they don't need 5 x £5,100 up front for a 5 year plan. They need 5 x £5,100, less the interest earned on the taxable bond part of the scheme.

    It doesn't appear that Principality have actually done their sums properly!

    The illustrations show this.

    Year 1:

    25 June 2010 to 5 April 2011 = 284 days on £25,500 at 4.20% = £833.33. Of this, interest on £5,100 is tax free and on £20,400 is taxed: so tax is 20% of £666.66 = ££133.33.

    Tax year 6 April 2011 to 5 April 2012 = 4.20% on £10,200+£166.66 tax free and on £15,300+£533.33 taxed = £435.40 tax free and £532.00 after tax.

    Tax year 6 April 2012 to 5 April 2013 = 4.20% on £15,300+£602.06 tax free and on £10,200+£1,065.33 taxed = £667.89 tax free and £378.52 after tax.

    Tax year 6 April 2013 to 5 April 2014 = 4.20% on £20,400+£1,269.95 tax free and on £5,100+£1,443.85 taxed = £910.14 tax free and £219.87 after tax.

    Tax year 6 April 2014 to 5 April 2015 = 4.20% on £25,500+£2,180.09 tax free and on £0+£1,663.72 taxed = £1,162.56 tax free and £55.90 after tax.

    Total interest over the term is £3,342.65 tax free and £1,719.62 net of tax.

    Hmm - the Principality's taxed figure is £55.91 less than mine - they've missed out the last year's interest on the taxed part of the account!

    Anyway, though, the point is that you didn't need to put in £25,500 in the first place to max out the tax-free ISA part of the plan. You actually could have put in less: £24,031.70 - £1,468.30 less in fact - and thereby earned less taxable interest. (The figures come out at exactly the same tax free interest obviously, and £1,468.30 of taxable interest, so saving £62.83 of unnecessary tax).

    I think Principality have tried to make things easy by suggesting you just put in the 3 or 5 years' worth of ISA allowances up front, but actually when they state "Maximised tax-free* Cash ISA savings for the duration of your investment" they don't point out that they are in fact making you pay too much money in up front and hence making you incur more taxable interest (and hence tax) than you might otherwise need to.
  • brewerdave
    brewerdave Posts: 8,500
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    MarkyMarkD wrote: »
    The Principality product doesn't quite make sense.

    If they are genuinely seeking to maximise your tax-free interest, they don't need 5 x £5,100 up front for a 5 year plan. They need 5 x £5,100, less the interest earned on the taxable bond part of the scheme.

    It doesn't appear that Principality have actually done their sums properly!


    Anyway, though, the point is that you didn't need to put in £25,500 in the first place to max out the tax-free ISA part of the plan. You actually could have put in less: £24,031.70 - £1,468.30 less in fact - and thereby earned less taxable interest. (The figures come out at exactly the same tax free interest obviously, and £1,468.30 of taxable interest, so saving £62.83 of unnecessary tax).

    I think Principality have tried to make things easy by suggesting you just put in the 3 or 5 years' worth of ISA allowances up front, but actually when they state "Maximised tax-free* Cash ISA savings for the duration of your investment" they don't point out that they are in fact making you pay too much money in up front and hence making you incur more taxable interest (and hence tax) than you might otherwise need to.
    You expect employees of Banks or Building Societies to be able to do basic maths or understand taxation rules ??:rotfl::rotfl:
  • Spiggle
    Spiggle Posts: 1,787
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    Thank you guys for your thoughts. :T

    Did you have any thoughts on the NCBS inflation proof option?

    TIA,
    Spigs
    Mortgage Free October 2013 :T
  • MarkyMarkD
    MarkyMarkD Posts: 9,912
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    edited 29 August 2010 at 9:25PM
    Inflation proof is fine, if inflation is higher than current prevailing fixed rates + 1%.

    As with all investment decisions, it's a gamble.

    I'm not personally convinced that RPI will be all that high over 5 years, on average, and therefore I would not go for "inflation proof". But others (at least, according to This is Money) see beating inflation as more important than life itself, and consequently wouldn't mind if they end up with just the equivalent of 2% per annum over 5 years if RPI pans out at 1% p.a. compound, when they could have had over 4% without the inflation proofing guarantee.
  • Kazza242
    Kazza242 Posts: 2,167
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    MissNobody wrote: »
    Hi Kazza

    I wasn't critising your excellent and useful thread. Santander could make things clearer and point out that you need their current account to operate the account on-line, I did read extensively before opening the account (on line) and never came across it, thanks for clarifying the situation.......:)

    Hi

    Thanks, I know you weren't critising the thread:). I agree with you, Santander really should make the terms of operating the ISA online a lot clearer. I hope that all went well with your withdrawal of funds from the ISA.
    Please call me 'Kazza'.
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