What should I do about my ISA?

scottishgirl87

My current ISA with Halifax (who I also bank with) has just reverted from 3% interest to 0.5% interest so the obvious thing would be to switch to another account/provider. However, my boyfriend and I are currently looking to buy a house and the money which I currently have in my ISA will be my half of the deposit.

Is there any point me transferring to a better rate when there is a good chance I will be removing the money completely before the end of the next tax year? I'm not sure whether I should just leave it for ease of access or if it would still benefit me to switch.

Mickygg

I would say defo yes worth transferring to another instant access ISA. It does depend on how much you have in the ISA, but even if you have £5k, based on 3% you would be getting an extra £125 over the next year by switching. That would help pay towards some solicitors fees!

scottishgirl87

Mickygg wrote: »

I would say defo yes worth transferring to another instant access ISA. It does depend on how much you have in the ISA, but even if you have £5k, based on 3% you would be getting an extra £125 over the next year by switching. That would help pay towards some solicitors fees!

Thanks, but if I remove it before the end of the tax year then surely I won't get any interest anyway?

psychic_teabag

For Halifax specifically, you can just redesignate the existing ISA to restart the bonus. (That doesn't prevent you transferring it anyway, but you'll get better interest for the few days it takes to happen.)

http://www.halifax.co.uk/savings/accounts/cash-isas/ISAoptions/

psychic_teabag

scottishgirl87 wrote: »

Thanks, but if I remove it before the end of the tax year then surely I won't get any interest anyway?

You'll earn interest for every day you have money in the account. (You could lose it again if you were to withdraw early from a fixed-term account, but that doesn't apply here.)

When you close the account, you'll get credited with all interest owed since the last payment.

The_Enforcer

You could also consider switching to a notice ISA, provided you are confident that you will be able to predict when you will need access to the funds, so you can give the required notice period.

However, at the moment, even the best of these that allow transfers in offer 3.15% - 60 days - and 3.10% - 45 days (if you have £35k+) - are not significantly better than most of the leading instant access ISAs. They are also variable, so as likely to drop (or increase) as most of the instant access ISAs.

I mainly raise this type of ISA as an option, because it's worth keeping an eye open for any new products that might offer an improved rate.

scottishgirl87

Thanks all, will take a look into it

SavingSteve

Easy option - get Halifax to switch to their best possible easy access rate, should be able to do that for you over the phone. Always better than leaving it at 0.5%, minimum effort (look up a non 0844 number using saynoto0870, so you can save on call cost too!)

Slightly better return, open a Santander 3.3% ISA, and fill out transfer form.

If you're likely to need the money in a few months probably a lot simpler and easier to go with option 1.

Under no circumstances would I suggest leaving as is, a complete waste.