iSA or non ISA

gwyn1_2

Just perhaps a silly question but one that I have been contemplating for some time, particularly since ISA rates have dropped. My lowest paying ISAis 2.85%, which while acknowledging this is tax free, as a basic rate tax payer if I put the money from the above into a non ISA Account paying 4%, and after deducting 20% tax I would be receiving 3.2% - better than the ISA.

Next tax year due to the increase in personal allowances I will be paying no tax. So surely whether now or next April I would be receiving more interest from the non ISA.

I will of course lose the tax free ISA 'wrapper' from the money transferred, but In April if the ISA rates improve I can always reinvest.

Anything I am missing with regards to this line of thinking.

jimjames

If you take money out of ISAs you have lost that tax free wrapper forever. If your savings are less than £5k and you will not be adding more to it then you effectively wouldn't lose anything by taking it out and putting back in at later date.

Equally if your savings are under £5k then the difference in interest may not be worth that hassle either.

If your savings are above £5k then it also depends if you will pay tax again in future.

innovate

Where do you get a non-ISA account that pays 4%, and one that lets you re-deposit your money into an ISA come next April?

iris

innovate wrote: »

Where do you get a non-ISA account that pays 4%, and one that lets you re-deposit your money into an ISA come next April?

I would like to know this as well.

I am a non tax payer, but I'm struggling to find anything over 3% at the moment:cool:

innovate

The only thing that comes sort of close interest-rate-wise is the First Direct Reg Saver at 8% AER. But that is a 12 month fixed term account and the max you can put in is £300 a month.

I suppose you could open a "good" ISA next April, into which you deposit the proceeds of the FD Reg Saver on maturity. And may be top it up with the difference to your total cash ISA allowance.

Other than that, I don't know of any instant access [savings] account that pays more (in AER terms, even for non-tax payers) than the top cash ISAs you can get.

gwyn1_2

iris wrote: »

I would like to know this as well.

I am a non tax payer, but I'm struggling to find anything over 3% at the moment:cool:

I have three TSB accounts paying 4% on up to £6000, one of which is available to use, all have instant access.

innovate

Yeah but this is no longer open to new applications.

gwyn1_2

innovate wrote: »

Yeah but this is no longer open to new applications.

I never said they were!! Did I?

innovate

It's not relevant to anyone looking for savings accounts now that we got super deals a few months ago, is it.

gwyn1_2

innovate wrote: »

It's not relevant to anyone looking for savings accounts now that we got super deals a few months ago, is it.

You obviously have a problem, I posted a question, I did not at any time intimate that it was a deal that was available or unavailable to anyone nor did I, at anytime mention a savings account.

I can not help it if you do not read a posting correctly or misread a posting for that matter. The responsibility to read a post correctly lies with the reader not the poster.

Though sometimes subliminal messages can be found in posts, I wonder if there is one in this post.

innovate

iris wrote: »

I can not help it if you do not read a posting correctly or misread a posting for that matter. The responsibility to read a post correctly lies with the reader not the poster.

I can read very well. Can you?

iris wrote: »

I would like to know this as well.

I am a non tax payer, but I'm struggling to find anything over 3% at the moment:cool: