Is it worth withdrawing all funds from ISA and putting in NS&I Certificate?

bgscotty

Hi,

I have £20,000 in a 3% ISA. I'm a tax payer.

Is it a reasonable idea to withdraw £15,000 (leaving £5,000), and then use the £15,000 to put into an NS&I certificate?

I know I would lose the tax-free 'wrapper' on the £15,000... but maybe it's worth it.

What advantages are there in keeping £15,000 in an ISA rather than using the funds to open a NS&I certificate?

Thank you for any tips.

le_loup

Who knows?
Why not hedge your bets ... and bets on inflation and interest rates is what you are asking ... put SOME into the NS&I offering.

lisyloo

What advantages are there in keeping £15,000 in an ISA

If inflation goes down youmight get more on your ISA.
Short term (12 months) I think that's unlikely but longer term it's a complete gamble.
You cannot regain your ISA allowances back (although you'll get new ones).

I personally would use my ISA allowance first because I believe ISA will be a good product forever whereas NSI is good sometimes (when RPI is high), but that's purely my opinion.

ses6jwg

I am of the opinion that one should maximise their ISA allowance first then if they have any taxable savings left they should look at moving that to IL Certs.

adindas

NS&I is only for 5 years, After five years where do you get the similar tax free product. You can not put it back into ISA.

If you want to lock your money for 5 years, you could also get cash ISA which pay net 5%pa.

But it depends on person to person ... I personally see my Cash ISA as a last resort to be used ..

bgscotty wrote: »

Hi,

I have £20,000 in a 3% ISA. I'm a tax payer.

Is it a reasonable idea to withdraw £15,000 (leaving £5,000), and then use the £15,000 to put into an NS&I certificate?

I know I would lose the tax-free 'wrapper' on the £15,000... but maybe it's worth it.

What advantages are there in keeping £15,000 in an ISA rather than using the funds to open a NS&I certificate?

Thank you for any tips.

Baldur

adindas wrote: »

NS&I is only for 5 years, After five years where do you get the similar tax free product.

It's normally possible to roll NS&I Index-Linked certificates over into whatever issue is available on maturity.

adindas

Let say that when it is mature and there is a new NS&I issue available with limits say £15,000. Is not that when you are rolling the old one which is already mature to the new issue, you want be able to put new money to take advantage of tax free and inflation beating. I might be wrong, I do not know ..

Baldur wrote: »

It's normally possible to roll NS&I Index-Linked certificates over into whatever issue is available on maturity.

Baldur

adindas wrote: »

I might be wrong, I do not know ..

You are.

See https://www.nsandi.com/savings-certificates-your-questions-answered

Q. Can I invest new money as well as reinvesting mature Certificates?
Yes, you can invest up to £15,000 of new money in each of the current Issues in addition to any amount you reinvest from mature Certificates.

lisyloo

I might be wrong, I do not know ..

Yes you're wrong.
Why no spend a few minutes checking before you post?

dunstonh

Remember that the current RPI published rate looks backwards. If you go into them now you will not get the last 12 months rate. You will get the next 12 months rate. In that period, you will see the impact of the VAT increase drop off. Fuel is an unknown but if it stabilises or comes down then you have to consider the impact there.

NS&I index linked certs are a hedge against inflation. Going 100% into them at the expense of cash ISAs is a risk. If you are willing to take some risks then consider putting some into investments as well.

adindas

Good to know this ...
But I am not going to put my cash ISA into N&S ....

Baldur wrote: »

You are.

See https://www.nsandi.com/savings-certificates-your-questions-answered

lisyloo wrote: »

Yes you're wrong.
Why no spend a few minutes checking before you post?