ISA versus Savings Acc

edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
6 replies 777 views
Lifes_Grand_PlanLifes_Grand_Plan Forumite
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edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
Hi guys,

I think this is a simple question but I could be wrong...

Looking at MSE's best "easy access ISA" is Cheshire B/S @ 2.3%

If I stick the money in my Santander 123 Acc I can get 3% but will be taxed.

Am I right in thinking that 3% after tax would be 2.4% so even taking tax into account, would be better with this option?

We're only talking a couple of thousand here and I never get close to using my ISA allowance so no issue about withdrawing it and paying back in later if needed.

Any thoughts appreciated.
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If you find my posts useful, "pay it forward" and help someone else out, that's how places like MSE can be so successful.

Replies

  • innovateinnovate
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    Yes, and get even more in a Nationwide FlexDirect. On the 123, be aware it costs £2 a month - so unless you have qualifying DDs paying more than £2/mth, and your balance is always between £3K and £20K, you don't actually get 3% AER. Also, you don't get a bean unless you have 2 DDs and pay in £500 a month (and £3K+ balance). The Lloyds/BOS Vantage accounts may be a little easier in terms of pre-reqs. But the principle of using current accounts for your savings is just fine at this point in history.......

    If want to make use of this year's ISA allowance, you can still decide to put your money into an ISA in March next year.
  • Lifes_Grand_PlanLifes_Grand_Plan Forumite
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    Thanks innovate, I do make good use of my 123 account with all the cashback from various bills so no worries about that or the £3k requirement.

    Cheers again
    A big believer in karma, you get what you give :A

    If you find my posts useful, "pay it forward" and help someone else out, that's how places like MSE can be so successful.
  • jimjamesjimjames Forumite
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    You can also use the Halifax current account to get £5 per month paid if you put £750 through. With a rate of interest in the feeder account too that could work out far higher than any ISA or savings account.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • Lifes_Grand_PlanLifes_Grand_Plan Forumite
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    Thanks JimJames - we already have a Halifax c/a each earning us the £5 a month and that then all gets transferred into the 123 accounts.

    Following innovates suggestion on the Nationwide account, I would go for that at 5% but does it require direct debits / standing orders to be going out of the account or is it just a £1000 a month funding requirement and thats it?
    A big believer in karma, you get what you give :A

    If you find my posts useful, "pay it forward" and help someone else out, that's how places like MSE can be so successful.
  • JevversJevvers Forumite
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    If you get the Nationwide FlexDirect and pay in for 3 months you can then take out their 2.5% ISA. As the FlexDirect 5% rate only lasts for a year, it may be worth bagging the ISA while you can and shifting the money over in March.
    Mortgage 1: £243,034 0.99%, i/o, ends May 2026 MFW date 20 Aug 2020
    Mortgage 2: [STRIKE]£166,966[/STRIKE] £159,066 0.99%, repaymt, ends Oct 2033
    Total: £402,100
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