Santander 123 Interest Date

MoneySaving_Newbie_2

Thanks for that.
I'm on a bit of a role with these questions now. Sorry to be a bore, but I have another. If the Santander account was my main account and I paid my income into it each month, am I right to think my £5,760 would get me a better return left in the 123 Account rather than in a cash ISA?

Archi_Bald

MoneySaving_Newbie wrote: »

Thanks for that.
I'm on a bit of a role with these questions now. Sorry to be a bore, but I have another. If the Santander account was my main account and I paid my income into it each month, am I right to think my £5,760 would get me a better return left in the 123 Account rather than in a cash ISA?

What interest rate do you get in your cash ISA? Anything above 2.4%ish would beat the 123.

But it isn't just that simple. If you don't use you ISA allowance in any tax year, it is lost for good. So you might want to save up in the 123 but just before the end of the tax year, transfer £5,760 into an ISA. Then save up again in the 123 for the next year's ISA (assuming the interest rates are staying similar to what we see now).

Similar applies to good Regular Savers, e.g. the First Direct one @ 6%.

And there are, of course, other current accounts, such as the FlexDirect @ 5%, and the Vantages @ 3%.

Gromitt

Assuming you pay basic rate tax and cashback pays the £2 fee, It would currently get you the equivalent of 2.4%.

If you think you'd be leaving it in your cash ISA then I would suggest leaving it in Santander until April next year and then depositing in an ISA then (even if slightly less) to build up your tax-free savings.

brewerdave

Gromitt wrote: »

If you think you'd be leaving it in your cash ISA then I would suggest leaving it in Santander until April next year and then depositing in an ISA then (even if slightly less) to build up your tax-free savings.

...Thats exactly my plan - if fixed cash ISA rates are any better by then that is:(

ColdIron

I wouldn't leave it until April, every year these boards have plenty of people complaining that their bank fluffed their ISA subscription made at the 11th hour