ING ISA or Kaupthing Account?

whiskey1983

Good morning!

I've got an ISA with ING Direct which currently gives 4.65% but I've seen the Kaupthing Edge account with 6.36% gross (6.55% AER) and I don't know which is better for me. Does the higher interest of the Kaupthing account actually give more as it's not tax free like the ISA? I've got £1900 to save at the moment and I'm expecting to have another £1000 or so shortly which would put me over my annual ISA allowance. If anyone can help it would be much appreciated!

Thanks,

David

Steve_xx

You would be better to move your ISA to Alliance & Leicester's ISA which pays 6%, or one of several other banks.

HSBC and Barclays have ISA's paying 6.25%, but you cannot transfer existing ISA's into those.

Kaupthings account is not an ISA, but after 20% tax would net you around 5.24%

Jonbvn

Transfer your existing ISA to a better paying one. Details as per the link.
http://forums.moneysavingexpert.com/showthread.html?t=401374

For funds in excess of the yearly 3.6k allowance, you should save in a normal savings a/c (like Kaupthing Edge). When the next tax year comes around, you can transfer these funds to a new cash ISA.

chinbergs

Overall, Kaupthing Edge would give you more money than the low paying ING ISA - but transferring to a high-paying ISA would give you even more money.

Icesave allows you to transfer all existing ISAs in and pays 6.1%, the last time I checked. It also pays your interest monthly. www.icesave.co.uk.

Paul_Herring

whiskey1983 wrote: »

I've got an ISA with ING Direct which currently gives 4.65% but I've seen the Kaupthing Edge account with 6.36% gross (6.55% AER) and I don't know which is better for me.

While the KE account would, at first blush, appear to be better (6.36*80% = 5.09%) the simplistic calculation doesn't take into account that the ISA allowance is a use it or lose it type thing, so if you're intending on keeping the ISA for more than one year, you're better off keeping the money in there.

Besides, as others have pointed out ING are hardly ranking very high in the tables, (in fact 4.65% is positively abysmal.)

Move it to another ISA provider.