Transferring Isa - is it worth it?

norbie

Hi guys,

I currently have an instant access cash isa with nationwide who I use for my current account and I also have an "e-savings" account with them where i store money that i dont want in ISA as i'm going to spend throughout the month (better interest rate than sat in current account). Very handy as I have a branch 5 minutes away so I can pay in and withdraw money easily.

I earn 4.8% on my isa (under £10k) and the best sort of rates are near 6%.

I was wondering if i should transfer it to a better rate? Only about £2.5k in there at the moment and I try to only put money in it that I know I will not need to withdraw but I would still like the facility where you can withdraw it if you desperately need to - dont like the idea of bond type things where its locked away!

I was looking at the iceland one that comes up at 6.1% on martins article but if it's just online how do i withdraw my cash? bank transfer takes days...

Sorry if I rambled a bit. Just wondered if it's worth changing for a higher % or stay where I am for the ease of it.

Thanks! :j

TomsMom

If it was me I would certainly be looking for a better rate than 4.8%!

I was looking at the iceland one that comes up at 6.1% on martins article but if it's just online how do i withdraw my cash? bank transfer takes days...

Bank transfers generally take 3 working days. Put your transfer request in on a Monday and it should be in your account on Thursday. That's not too bad. As far as I know, that's the only way to work an online account - online. Unless you can find one thats online/postal

Nomad25

I have one with Icesave and you are right, it can only be operated on-line through one or two nominated [by you] bank accounts. Nationwide is one of my nominated accounts.

TomsMom is right about the transfer time and about looking for a better rate, whoever you choose. I would too.

It just needs a bit of pre-planning/forethought, ask yourself are you likely to need the money that instantly? 3/5 days [watch out for weekends] is not so bad.

I've been doing this transfer in - good times, transfer out - needs must times, for the past 3 years and its worked well for me.

norbie

Thanks guys!

It sounds like I should look around then if 4.8% is bad. Is the transfer an easy process? Can I do it mid tax year and retain all my interest etc without losing anything?

I think I will be ok with 3-5 days wait for bank transfer. I'm going to be getting a student account for the interest free overdraft to cover myself just in case.

On a side note, would it be wrong to take out a large chunk of interest free overdraft and whack it into my ISA to make money on it?

TomsMom

norbie wrote: »

Thanks guys!

It sounds like I should look around then if 4.8% is bad. Is the transfer an easy process? Can I do it mid tax year and retain all my interest etc without losing anything?

Chose a provider who accepts transfers in. Get the transfer form from the new provider, (this can probably be downloaded online - I've just done one)fill it in and send it back (I had to post mine snail mail to new provider). The new provider then requests your ISA funds from your existing provider. This can take up to 30 days.

You can do it any time. You will get interest up to the day the existing provider sends your funds on to the new provider. The interest you have earned will be included in the total sent to the new provider.

I think I will be ok with 3-5 days wait for bank transfer. I'm going to be getting a student account for the interest free overdraft to cover myself just in case.

On a side note, would it be wrong to take out a large chunk of interest free overdraft and whack it into my ISA to make money on it?

Sorry, can't answer that, never had anything to do with overdrafts.

ed123_2

...if you can try to keep the full amount allowed in the ISA which is £3600 for the current tax year 08/09. If you withdraw cash from the ISA account you can't put it back and as the interest is tax free-not a good idea. I would never borrow to put money into savings but if the overdraft is interest free & you feel you won't need this facility in the near future then you could put the money in the ISA. I know you say you don't like the idea of a bond but if you can manage it this would be the best idea-Nationwide have 1/2 year one's paying 6.15%...

norbie

ed123 wrote: »

I know you say you don't like the idea of a bond but if you can manage it this would be the best idea-Nationwide have 1/2 year one's paying 6.15%...

6.15% Gross but 5.12% Net though. And when we talk about ISA we mean Net don't we? So ISA would still be better than Bond?

Nomad25

Nationwide do a 1 year fixed ISA bond paying 6.15% [me and OH have got these] - check it out here:

http://www.nationwide.co.uk/pdf/savings/P115_ISAs.pdf

so you know exactly what you're getting into.

Nomad25

Sorry, I should have said anything wrapped in an ISA pays interest, no tax - inc this bond.

natman

Hi Norbie,
Yeah i would look at getting a better interest rate too.

I have opted for a newcastle buidling society ISA. Paying 6%.

I did this because - you can transfer in, you can manage it by -
Internet online
post
phone
Branch
Not many others give you this for 6%, they have been really helpful too

McKneff

I have an Abbey Cash Isa, this comes with a cash card and can be added to
or have withdrawals from machines. It is over 6%