Savings Rate Question

manic1_2

Baldur wrote: »

but you can transfer the ISAs to a provider that pays a better rate - 3% is certainly available, e.g. First Direct (fixed rate until next November - but easy access)

You can use them as you wish, as long as they are easy access.

What you need to look for, as previously posted is the best net rate - if transferring your Cash ISAs achieves that do it. Simply withdrawing them loses any tax benefits and you would be potentially losing more than half a percent just looking at the difference between a 3% ISA and your proposed 2.4% net taxable account.


<Edit> The difference in interest over a year on your £17.5k would be:

ISA @ 3% - £525 compared with A&L @ 2.4% (net) - £420

I see what you are are saying.

The ISA total is actually made up of 2 ISA's £10,500 in mine and £7,200 in my girlfriends.

I guess we will transfer the ISA's to another provider (like First Direct)
Open up a savers account and pay £1100 into it each month.
From now until april thats a total of £5500 paid into the savers account.
Come april we pay £3,600 of the £5,000 into my ISA (as its the larger ISA) and the rest (1900) into my girlfriends and keep going until her ISA is then filled.

Does this seem a bettter plan?

Baldur

Much better - but also look for a better rate account for your monthly savings than A&L are offering, e.g. the Citibank @ 3.3% (2.64% net) or ING Direct are giving 3.2% (fixed for a year but with easy access), which would give a net rate of 2.56%.

Halifax Regular Saver is doing 5% Fixed (4% net) for monthly savings between £25 & £500 at the moment, but their website indicates that this rate may change on 16th October. It may also not suit you as no access is permitted for the full year.

manic1_2

Baldur wrote: »

Much better - but also look for a better rate account for your monthly savings than A&L are offering, e.g. the Citibank @ 3.3% (2.64% net) or ING Direct are giving 3.2% (fixed for a year but with easy access), which would give a net rate of 2.56%.

Halifax Regular Saver is doing 5% Fixed (4% net) for monthly savings between £25 & £500 at the moment, but their website indicates that this rate may change on 16th October. It may also not suit you as no access is permitted for the full year.

Thanks for your help