Money currently in poor performing cash isa

tractorboy23

My wife and I have a cash ISA which is doing very badly. I imagine the interest rate is approx 0.1%, but it crashed a number of months ago. I thought it was necessary to stay with the provider for the 5 years, but it now appears (from this site), that this may not be the case.

There is approx £8k in the fund, and we save £250 per month. In May 10 we will need to withdraw approx £3,200 for a holiday. Notwithstanding that we should be able to continue saving. The 5 years are up in approx Sep 10 anyway.

What would you recommend. Is there a product out there that I should be switching too. And would my current provider not have the right to stop me switching, or could they financially penalise me for doing so?

Many thanking yous

northwest1965

I transferred an ISA into the Natwest. There aren't a lot that allow new monies in. Have you look at A&L monthly online saver? I think but dont quote me, the rate is 3%
Thier ISA is 3.5% and you can transfer with them

amcluesent

> In May 10 we will need to withdraw approx £3,200 for a holiday.<

Why not put the £250/month into a better account now, you can get 3% without a penalty. Taking money out of the ISA wrapper isn't so clever as you can't replenish that tax-free status

Jake'sGran

There is no point in leaving this cash ISA where it is. You can transfer it if you can find a better one. There might be something in Martin's list
list - click Banking Saving at the top and scroll down to cash ISAs. I am not sure what you mean when you say it crashed but it is a useless ISA anyway.

Please remember that you cannot withdraw the money yourself, it has to be done by the new provider. Also, if you do remove money from a cash ISA you cannot put it back in and the advantage/s has been lost. The other reason people use them is to avoid Capital Gains. This does apply to me as my ISAs, PEPs etc are rather old now and have gained a lot.

Some people use savings accounts instead especially if their full amount of Tax Free Pay has not been used up - like me, as I am over 70 and am allowed to earn over £9K.
ISA rates are mostly less than cash savings rates.

Have a look at EGG and TESCO for their ISA rates. They are not great (approx 3%) but much better than the one you are getting now.

G_M

Whether you can transfer the money to another ISA depends what product you have. As you don't tell us, noone can answer you.

If you have a 5 year fixed rate product, it probobly prohibits withdrawals, closure or transfer during the 5 years (though not necessarily).

However since you say the rate has dropped, it sounds like it is not a fixed rate, which makes me wonder what you mean by "I thought it was necessary to stay with the provider for the 5 years".

So, which bank? Which product? Product issue number (if appropriate); date opened?

Or why not simply ring your bank and ask ...?

jennifernil

Maybe the OP is thinking back to the old TESSAs, was there not something to do with 5 years there?

G_M

Maybe. But unless/untill the OP comes back with info we can only speculate.

Jake'sGran

In his first sentence he did say CASH ISA.

RayWolfe

Ah! But he also said:
"My wife and I have a cash ISA which is doing very badly ..... it crashed a number of months ago"
Neither of which statements indicate a standard cash ISA.

Mikeyorks

Jake'sGran wrote:

In his first sentence he did say CASH ISA.

....... but also described it as a 'fund' which when added to the 'crash' and the '5 years' strongly suggests S&S.

............ but then 'I imagine the interest rate is 0.1%' ...... persuaded me that clarification was essential.