Out of ISA into Bond

savetilibleed

I wouldn't normally think of doing this, but I'm thinking of raking some out from my YBS e-ISA (currently 2.75%) and putting it onto a top paying fixed rate bond as long as the net rate is more than 2.75%. I wouldn't want to do more than £10,000 I don't think. Am I mad?

Nala

I don't know if you're mad or not....but I am intending on leaving my ISA untouched.

I understand where you're coming from with regards to interest it's just that when the rates go up again (and I believe they will, not today or tomorrow, but they will) I will have lost the tax benefit of the amount I've withdrawn.

Assuming the maximum per year in a cash ISA will remain at £3,600 then it will take a few years to re-coup the tax free wrapper on the whole amount.

withnell

You can transfer to an Natwest ISA paying 3.25% at the moment, and I'm sure many more will follow - are you saving for next year, or for the longer term - the tax wrapper will become more useful as rates recover

malik999

savetilibleed wrote: »

I wouldn't normally think of doing this, but I'm thinking of raking some out from my YBS e-ISA (currently 2.75%) and putting it onto a top paying fixed rate bond as long as the net rate is more than 2.75%. I wouldn't want to do more than £10,000 I don't think. Am I mad?

Short term view imo.
Once its out its out/gone. You instantly lose your tax free wrapper for those years forever and can never get them back. In a few years you will probably resurrect this thread saying how you wished you'd left your 10k in the tax free ISA

posted_2

Tories will probably be in shortly, so, if you are a basic rate tax payer, ISA's will be irrelevant.

malik999

posted wrote: »

Tories will probably be in shortly, so, if you are a basic rate tax payer, ISA's will be irrelevant.

There are no basic rate tax payers on this forum

MsHoarder

malik999 wrote: »

There are no basic rate tax payers on this forum

Since when? Its easy to save when your income is substantially more than your rent(mortgage). Some of us need a bit more advice.

elektra

savetilibleed wrote: »

I wouldn't normally think of doing this, but I'm thinking of raking some out from my YBS e-ISA (currently 2.75%) and putting it onto a top paying fixed rate bond as long as the net rate is more than 2.75%. I wouldn't want to do more than £10,000 I don't think. Am I mad?

I did exactly that as am non taxpayer and quite likely to remain one. I had built up a few years from tessa days and more or less left it alone. Never contributed more to it as other accounts were paying more than isa. It seems now Isa rates picking up again.

savetilibleed

elektra wrote: »

I did exactly that as am non taxpayer and quite likely to remain one. I had built up a few years from tessa days and more or less left it alone. Never contributed more to it as other accounts were paying more than isa. It seems now Isa rates picking up again.

I'm a tax payer only by dint of the amount of saving interest I have been earning. I filled out one of these online assessments to see if I could register to fill out an R85 and I can't. I just worked out my annual income from a taxable benefit + the taxed interest. It is only about £1200 over the personal allowance. I have some fixed interest bonds that finish soon so that'll reduce my income more, plus I'll lose that benefit soon too. Once I can get a job again, whenever that might be - well all that will be acedemic. Might be I can either claim gross interest or maybe reclaim tax overpayed until that happens.

Sorry that is rather off-topic, except I have a substantial amount in that cash ISA.