ING Savings Account

hansi

Mrs Hansi and I have something in the region of 10K in cash Isa's wth IF paying 4.85% and with yearly interest. As Mrs Hansi is a non taxpayer there is little point in keeping her money there. She also has an account with ING also paying 4.85% but on a monthly basis. Would it make sense to move both ISA's to the ING account, one advantage that I can see that you can move money in and out unlike an ISA, but would I make more interest by having it monthly. I can never work these thing out ::) ::)

MJSW

If you want monthly interest, why not just ask IF to pay it monthly instead of annually? IF let you choose whether you want it monthly or annually, and you can change your decision up to twice in any 12 month period. However, changing from annual to monthly interest wouldn't really make you any better off, as the monthly rate at both ING and IF is actually only 4.75% (which is equivilent to 4.85% when compounded gross).

If you want a better return, you could consider switching the ISA to somewhere with a better rate (Abbey National postal or Lloyds-TSB for example), or even a Cahoot savings account paying 5.5% (not an ISA) in your wife's name as she is a non-taxpayer. Bear in mind though that whilst your wife may be a non-taxpayer now, if she later became a taxpayer she would not be able to replace the £10k into an ISA once she has withdrawn it. As the annual mini cash ISA limit is to be cut to only £1,000 in a couple of years, it could take 10 years to get £10k back in there!