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ISA or Santander Saver

I have more than £5000 to put into savings, and already have a First Direct ISA which pays 3% interest until November 2010.

I could fill up my ISA allocation immediately but recently read on this website about the Santander saver for first time buyers. This pays 5% and you can deposit up to £5000 and then regular savings of up to £300 a month. I am a basic rate taxpayer so this would pay 4%.

Is there any reason why I would not put my money into this account rather than into my ISA? The only reason I can think of is the ongoing tax benefits of the ISA beyond this year and keeping that tax free amount for next tax year too.

However, I don't see any reason why I could withdraw my money from Santander in March 2011 to put into my ISA and in any case I expect to use all the money I have in my ISA thus far plus my £5000 for a house deposit later in 2011.

Can anyone tell me if there is a flaw in my reasoning? Thanks

Comments

  • Consumerist
    Consumerist Posts: 6,311 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    I'd say you've got it about right in terms of the return on your investment providing the additional £300 pm of regular savings will keep you fully invested.
    >:)Warning: In the kingdom of the blind, the one-eyed man is king.
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