1.5% (or 1.65%) ISA versus 4% interest on current account

SG27

The 'NISA' rules meaning £15k can be put in means that for most people there is no point suffering a lower interest rate to keep the tax free wrapper. My ISA rate is 2.5% it expires on 6 April. I have £5000 so I will now be closing my ISA for high interest current accounts. This will be the first time in about 10 years I've not had an ISA!

jimjames

SG27 wrote: »

The 'NISA' rules meaning £15k can be put in means that for most people there is no point suffering a lower interest rate to keep the tax free wrapper. My ISA rate is 2.5% it expires on 6 April. I have £5000 so I will now be closing my ISA for high interest current accounts. This will be the first time in about 10 years I've not had an ISA!

Well done for seeing through the misleading info!

I find it very frustrating that there is this fanatical hype especially around this time of year that an ISA is the best place to put your savings that is perpetuated by the very people who are supposed to be helping consumers get the best deal.

When the average person has under £2000 in savings and 66% of people either have no savings or under £1000 then in the current circumstances a cash ISA is a complete irrelevance.

For that two thirds of the population the media and sites such as MSE are doing a great disservice by continually hyping the ISA bandwagon rather than the options that would give the best return. With carefully planning you can get the equivalent of 12.5% on £1000, no rate anywhere near that is possible in a cash ISA. To compound the problems for those people that do have substantial savings sites such as MSE then fail to make any serious mention of the S&S ISA options which for many would be a more appropriate answer if they understood how they worked and the risk involved.

Phew, rant over!

innovate

One of the two savingschampion ladies was on BBC Breakfast this morning. Between the interviewer and herself, they managed to fuel the 'must deposit now' hysteria, with no qualification as to whom it may beneficial for, and why. Oh, and of course it was all about cash cash cash.

Shame on savingschampion and shame on the BBC for producing such a meaningless piece of journalism.

Lois_and_CK

jimjames wrote: »

With carefully planning you can get the equivalent of 12.5% on £1000

Can I ask how you can do this please?
Thanks

apt

Lois_and_CK wrote: »

Can I ask how you can do this please?
Thanks

Keep it in a TSB plus current account and bounce it to and from one, two, three or four Halifax Reward current accounts (only one reward account plus plus one joint account allowed for new applicants) each month. Two active direct debits required per Reward account.

jimjames

apt wrote: »

Keep it in a TSB plus current account and bounce it to and from one, two, three or four Halifax Reward current accounts (only one reward account plus plus one joint account allowed for new applicants) each month. Two active direct debits required per Reward account.

The one I had in mind was Nationwide at 5% but it is the same principle.

£1000 at 5% gives £50
Halifax account gives £75

Total on £1000 is therefore £125 = 12.5%

Lois_and_CK

Is the Halifax account the one that pays £5 a month if you pay in £750 and have a couple of direct debits?

adindas

Lois_and_CK wrote: »

Is the Halifax account the one that pays £5 a month if you pay in £750 and have a couple of direct debits?

Yes. The figure from jimjames £75 is the figure before tax. Keep in mind you get £5 net without tax deduction ....

Rasplicious

I'm really happy with all the responses as it's given me some clear direction and answered the questions I had as well as some I didn't have but should have thought of.

Plus I had no idea that the TSB account existed so have now applied for that and, having read the TSB thread that FreddySmith directed me to, will try to open a second TSB account also.

Thankyou everybody for taking the time to respond and for being so kind and providing useful guidance.

moneysavinggirl40

jimjames wrote: »

The one I had in mind was Nationwide at 5% but it is the same principle.

£1000 at 5% gives £50
Halifax account gives £75

Total on £1000 is therefore £125 = 12.5%

not £60? 5x12