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Is transfer into ISA worthwhile?

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Hi,

Can anyone please help, I can't work this out.

I have a savings account paying 3.1% AER. My cash ISA is paying 2.75% AER.
Is it worth transferring my allowance into the ISA at the moment,
or should I leave it alone and concentrate on booking my hols, which is much more fun?!!

Thanks for any help.
Di.

Comments

  • You would receive marginally more interest in the ISA. If you had £100, then in the savings account you would receive 100*0.031*0.8 (assuming you are a basic rate tax payer) = 2.48 interest over the year. In the ISA you would get 100*0.0275 = 2.75 interest.
  • Although the benefit is marginal at the moment (assuming you're a basic rate tax-payer), if you don't transfer the money into a tax-free account, it won't benefit from that in the future when it is possible that ISA rates will become more attractive.

    However, if you're thinking of spending the money in the near future then there's really no point in putting it into an ISA.
    "The trouble with quotations on the Internet is that you never know whether they are genuine" - Charles Dickens
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