How to get the best out of £20000

hayley39

Hi , I am new to saving and not sure what to do next ,last year tax year I put £5640 in an ISA in my name and the same for my Husband for a fixed rate one year. I now have £20000 in Santander 123 which is 3% intrest, butshould I put all of this in to an ISA account, Or am I missing something?
My husband only wants safe ways of saving no stocks and shares or bonds.
Many thanks, Hayley

xylophone

You can each open a cash isa for this tax year 2012-13 (£5460 each)
http://www.moneysupermarket.com/savings/cash-isas/?gclid=CMCJ4r2oqrACFYt-fAodLxHRUw&source=GOO-131774AA&p=0&keywords=+%2Bbest+%2BisaExact&ef_id=zg29z9B6MjYAADLkFkwAAAAP:20120531102835:s

droopsnoot

Are you saying that you put the allocation into a 1-year ISA last year and you've now taken it out of the ISA and put it in the 123 account, or is it still in the ISA?

If you withdrew to the 123 account, that was a mistake (in my opinion), as you've lost the tax-free status on that money. If the latter, you should probably move your full allocation each into an ISA (either the one you already have, if allowed, or another one) so that will be a further £5640 each. That money now can earn interest without paying tax on it, and will retain that status as long as you keep it in an ISA. So each year you can build up more and more money that can earn tax-free interest, but only up to the limit per tax year.

OK, the interest on a cash ISA might not be much different to a standard savings account at the moment, but it might change and once it does, you want to have as much as you can in the tax-free ISA status.