What's the best type of cash ISA for this...?

d712

Hello

I have a variable rate cash ISA that is currently offering a highly competitive 0.5%...

I don't have another £3600 to deposit at the start of the new tax year so over the course of the next tax year, I will be aiming to deposit money into an ISA as the months go by.

That rules out a fixed rate ISA bond where only one deposit is allowed at the start. What is the best ISA out there that will allow me to make deposits whenever I want that offers the best interest rate without the eyecatching introductory offers that drop after a few months?

Also, I don't particularly want to keep my money in the 0.5% ISA. What are my options? If I transfer the ISA to a different bank/building society will I incur a penalty for doing so?

Many thanks

I_luv_cats

Compare accounts on the web FSA / Money Supermarket.


You can transfer cash ISAs from a previous tax year from one provider to another without having an effect on the current year’s allowance – and you can also transfer the current year’s ISA to another provider.
Not all of the best-buy cash ISAs accept transfers so, if you are shopping around for a new home for last year’s cash ISA, you need to make sure you read the small print before comparing rates.

I_luv_cats

Some deals out there, (a) If you don't make any withdrawals you get a bonus
(b) Bonus for a year for a new account
(c) Better interest rate if you have another account with that bank
(d) Smaller Companies
(e) If you operate your account on line/phone/post only better rates avail

d712

Another alternative is this...

Close the ISA and use the £3600 to make a one off payment off my mortgage. The penalty for doing so would be £130 which I think is relatively modest.

Is this worth it?

Thanks

I_luv_cats

Do you need some money for a rainy day / emergency!!

Is your mortgage where you link a savings account and then you could get the money out again?? (small print permitting)

Is your mortgage rate higher and you already have savings??

d712

My mortgage is at 4.88%, my ISA is at 0.5%.

There is no link between my savings account and my mortgage, they are with different banks/building societies so I would not be able to get back anything I use to pay off the mortgage.

What do you reckon I should do? I suppose I should have money set aside for emergencies.