Advice needed on which savings to use

frankiew13

Hi

I would really appreciate some advice on how to pay for my car. Currently I have just over 10k in a natwest e-ISA which pays at 2.5% on balances over 10k and 2.05% on balances from £1 - £9999. I also have a Index-linked savings certificate with NS&I which I opened in April 2007 for a 5yr term. It is currently worth around £3200.

I need around £3000 to pay for my new car and I was hoping someone could advise me as to what is better to do.
Should I cash in my index-linked savings early and put the extra £200 in my ISA? Or should I keep this and pay out of my ISA and then earn 2.05% rather than 2.5%?

Thanks in advance for the help.

Frankie

Lokolo_2

If the index linked NS&I bonds are at a reasonable value, it may be worth selling them since you've had them in there for 3 years already.

If you withdraw from your ISA, you won't be able to put that amount back in anymore, most people advise you to keep the ISA untouched as its tax benefits could bring you fortune in the future.

Besides, that £3k you need is very close to the amount you have in NS&I, It would make sense cashing that in and putting the remainder into your ISA as you mentioned :j

getmore4less

If you are not filling the ISA allowance in future years then cashing in some of those will not be an issue you have unused allowances to top them up at small cost.


Index linked savings are not replaceable and are about the only thing that beats inflation currently.

Can you pay by CC, a long date purchase card(tesco) might provide enough credit limit and even if the car company charge a bit you may be the cheapest way without losing the current good savings schemes.

apt

I would take the £3,000 out of the ISA and transfer the remaining sum to a better paying ISA elsewhere. You can get 2.7% with instant access. See http://moneyfacts.co.uk/compare/savings/cash-isa/transfer/