MSE News: Millions of savers earn sub 1% interest

wizk1

The majority of those accounts will be those which are years and years old. If people have forgotten about money in old savings accounts, the banks know that they aren't bothered about moving it to a one with a better rate, so can get away with paying paltry interest rates. The "if you snooze, you lose" proverb shows it's head here.

bubbles0169

hello im sorry if its a simple question but could you tell me if id be better off moving my £1200 out of my 0.9% AER ISA into a lloyds monthly saver(ive a current account with them)which is 5% AER, I am a basic rate tax payer

wizk1

It's up to you. If you've used up your tax-free allowance this year, you'll need to be aware that if an ISA better than the monthly saver comes out, you won't be able to re-deposit the money. Similarly, if you haven't used all your allowance, your money would be tied into the 1-year agreement with LTSB anyway. It's the risk everyone takes I'm afraid.

KingL

bubbles0169 wrote: »

hello im sorry if its a simple question but could you tell me if id be better off moving my £1200 out of my 0.9% AER ISA into a lloyds monthly saver(ive a current account with them)which is 5% AER, I am a basic rate tax payer

Clearly you would get more interest in the regular saver, but you also have an option to move the cash ISA into a better paying cash ISA. In the short term you will still probably get more interest from the regular saver, but also consider the longer term advantages of ISAs. If you leave your money inside ISA tax-protection, then you will get tax free interest and tax free interest on that tax free interest in years to come. So, it depends on your time-horizon really.

Also check the retrictions on the regular saver. They will likely be a max amount you can transfer each month, so you'd probably take 3 months to get your £1200 across. There will also likely be a min amount you have to pay in each month. Can you commit to making a deposit every month ?

bubbles0169

i can miss a few payments if i want http://www.lloydstsb.com/savings/monthly_saver.asp

bubbles0169

i opened the ISA with £3600(some of it was my sisters money)im hoping to get married in the next couple of years and to go back to new york on holiday so i need a couple of years at least to save up
im on DMP(no interest or charges to pay, if i use my ISA money it wont pay all the debts off, i can afford to keep the DMP going which is for the next couple of years) and now i am doing more hours at work i dont know wether to put the extra money towards the DMP or put it in savings with the high interest
its all so confusing!
any opinions please?!