Santander 123 account - setting up the benefits

Jani9

I'll need to find out the rate on the ISA to see which is best.

No luck on the premium bonds, think I might take them out!

innovate

If you are a Santander 123 customer ( current acct or credit card), you are eligle for their 2.1% 2- year fixed rate ISA which allows transfers in. That might be a compromise for your ISA money if you we're going to open a 123 anyway. It keeps your ISA money tax free, and you'd only get marginally less interest than in the current account (approx 2.4% vs 2.1% for a basic rate tax payer, about £18 a year).

A lot would depend on what you plan to do with the money - if you are likely to spend it in the next couple of years, you might as well ditch the ISA and pocket the extra £18. If you are likely to keep the money for 2+ years, keeping it in an ISA could be a better choice.

Note, however, that you cannot make regular contributions to a fixed rate ISA (unless you have one with Lloyds, but their rates are even worse than Santander's)