Some Feedback Please

chris_topher97

Right heres the situation, i have about £4,100 in a Natwest Cash ISA earning interest at 4.6%, and so i want to make better use of it.

I still have my full £3,600 allowance this year, but no savings to go in there.

Theres a lot of talk on here about the best ISA's available but most discussed do not allow for balance transfers, ruling out most of the field.

I have also personally ruled out switching to Icesave's because i wouldnt feel comfortable.


So here's the plan i've settled upon, i just wanted to get everyones opinions and thoughts on it.


I recently took out the Egg money card, for the 1% Cashback on purchases, and so i thought i'd take a look at their ISA's. It offers 6.05% but does not allow for balance transfers. More intersting though was there Savers account, offering a 12month introductory offer of 6.3% dropping to 4.75% I am going to withdraw everything from my natwest ISA!! :-o and put it into the Egg savers account, then come march next year open an Egg ISA and move the full £3,600 allowance in, then come june next year before the rate drops to 4.75% move a further £3,600 into the ISA.

Any better ideas then please share.

UproarUK

chris_langs wrote: »

I am going to withdraw everything from my natwest ISA!! :-o

Are you a UK tax payer or are going to be one in the forseable future? If so I think this would probably not be a good idea. I think most people on this board would agree there are few cirumstances where withdrawing your cash ISA to put it into a normal savings account is a good idea.

If you pay tax at the basic rate you would effectively be earning 5.04% on the Egg savings account before the rate drops. There is also no reason to believe that there will still be the same rate on the Egg ISA in 12 months time. You would even be better witdrawing £3600 and putting it into the Egg ISA now rather than doing this (although I am not suggesting you do).


If you are not comfortable with Icesave I would suggest opening an ISA with Alliance & Leicester (Currnetly 6.00% AER) and transferring in your NatWest ISA. This way your money is still protected from Tax by your previous ISA allowances, and you also have this years allowance, and next years allowance free should you need them in the future.

You might find the following article helpful http://www.moneysavingexpert.com/savings/cash-isa-transfers

LucyTheDwarf

Don't withdraw your ISA money! Transfer to one of these providers, who still offer a great rate.

http://www.moneyfacts.co.uk/savings/bestbuys/mini-cash-isas-accepting-transfers-in.aspx

(personally, I'd go for Principality BS e-ISA) That way, you get the great rate now, and tax free, rather than waiting till next march, and settling for a not-bad rate in the meantime.

The savers account at 6.3% is okay, not the best but not bad, but seeing as you've not used this year's ISA allowance, any money you do get to save would be far better going into one of the above ISAs.

chris_topher97

Ahh, i hadn't realised the 6.3% rate was taxable, making it a not very good idea afterall. Thanks for the advice.

I will be a returning student in september so am not entirely sure if i would be paying tax on the savers account, but its probably not worth the risk of finding out, much better to keep my money in the ISA.

I think i'll go with the BS e-ISA, as A+L is only a 1year introductory rate.


On a different topic, when i go back to uni i have a £3,851 student loan available to me. Originally i'd decided not to take this up, as i will be getting given close to £13k for taking the PGCE course and so will not require the loan. And also i didnt want to add to the £12,500+ i already owe.

However i'm well aware that the interest on these loans (unsually high 4.8% this year) runs well below what you can earn in an ISA, my real concern is where do i put it all? What safe alternatives are they to earn more interst than a student loan charges once my ISA is full??