On an ISA to Nothing

charliecat39

I have had £3000 + last tax year (2013/14) in my TSB ISA and received the grand interest on this of £8.49 from TSB (Lloydstsb before it split).

I'm hopeless at maths but I think this is an interest rate of just over a quarter of 1% (about 0.266%)

Is it worth having this ISA?

I have other savings in an easy saver account and would be able to put £15,000 in an ISA in July.

evenasus

I would find the best ISA rate you can and request a transfer of your TSB ISA to it.

jimjames

evenasus wrote: »

I would find the best ISA rate you can and request a transfer of your TSB ISA to it.

I disagree.

I would find the BEST rate you can regardless of account and put the money in it.

At the moment that is a TSB current account paying 5%. There is absolutely no point in the tax free status when it earns you less money. You'd need 2 of the TSB accounts but that's a minor problem.

charliecat39 wrote: »

I have had £3000 + last tax year (2013/14) in my TSB ISA

Is it worth having this ISA?

I don't think so. You'd get £150 interest over a year with TSB. Combine with a Halifax account and you'll get £225 gross on your £3000.

A massive difference compared to £8.49

If and when ISA rates improve you can take out a new one at that point but in the meantime it is far better to get the maximum return. The only reason not to do this is if you have a bad credit rating, if you have more than the ISA limit in ISA accounts or if you intend to max out that ISA over the next few years. Very few people are in the position to save £15k per year though.

charliecat39

have now moved money out of ISA and opened two Classic Plus TSB accounts...5% interest on both!:T

badger09

charliecat39 wrote: »

have now moved money out of ISA and opened two Classic Plus TSB accounts...5% interest on both!:T

Well done!

Don't forget to meet all the T&Cs, as unlike a cash ISA, you can't just pay in and forget these accounts for a year.

Please now spread the word to your friends & family. Cash ISAs are not always the best place for savings

@jimjames
Keep it up - another convert :T

innovate

charliecat39 wrote: »

have now moved money out of ISA and opened two Classic Plus TSB accounts...5% interest on both!:T

Well done! Better than a cash ISA for now.

Just to make sure - have you changed your statement settings on both accounts to paperless? Sneaky pre-req for interest payment......

Milarky

innovate wrote: »

Well done! Better than a cash ISA for now.

Just to make sure - have you changed your statement settings on both accounts to paperless? Sneaky pre-req for interest payment......

Important: set up standing orders of £500 from each new account to your current account [of choice] with a different, and bank standing orders for the same amount back set for the same day of the month. This satisfies the requirement for funding to qualify for interest. Standing order instructions should not usually result in you being charged for trying to pay them provided that funds 'cross' on the same day. [See interbank agreement from 2013]

C_Mababejive

I believe that cash ISAs are a bad choice now and will continue to be so for some years. They are just being used as a cash cow to provide cheap money to refinance otherwise insolvent banks. I will not be putting anything into a cash ISA this year nor for the foreseeable future.

TrustyOven

Milarky wrote: »

Important: set up standing orders of £500 from each new account to your current account [of choice] with a different, and bank standing orders for the same amount back set for the same day of the month. This satisfies the requirement for funding to qualify for interest. Standing order instructions should not usually result in you being charged for trying to pay them provided that funds 'cross' on the same day. [See interbank agreement from 2013]

Won't there be a race-condition on your accounts if the standing orders are set for the same day?

ie.

Bank AC 1 Bank AC 2
Monday: £0 £500
Tuesday: £500 << (£500) £0
Weds: £0 >> (£500) £500

and all is good, because the transactions are in the expected order.

But if on the same day, there's no guarantee of which order the SOs run? (or is there??)

This is the classic race condition:

Bank AC 1 Bank AC 2
Monday: £0 £500
Monday: £-500 >> (£500) £1000
Monday: £0 << (£500) £500

But technically the first bank account went into overdraft, so you would get hit by charges?

Or does it not matter, as long as after the end of a working day, the balance is not overdrawn?

Archi_Bald

TrustyOven wrote: »

Won't there be a race-condition on your accounts

race condition? enlighten me please what one of those is. Another urban myth perhaps?

TrustyOven wrote: »

does it not matter, as long as after the end of a working day, the balance is not overdrawn?

no it doesn't matter

TrustyOven

Archi_Bald wrote: »

race condition? enlighten me please what one of those is. Another urban myth perhaps?

Sorry, it's late and I instinctively used that term without realising other people might not be familiar with it.

It's a computing/electronics topic (examples often use bank accounts as analogies).

They are synchronization problems between shared resources.

http://en.wikipedia.org/wiki/Race_condition

http://stackoverflow.com/questions/310282/explaining-race-conditions-to-a-non-technical-audience

I wondered about this the other day when setting up my "test" standing order to my new Halifax account to get the £5 interest. I didnt think a pay in and pay out SO on the same day would have been wise, in case the pay in SO was delayed, and the pay out SO went first, effectively bringing the balance below £0 and getting charged for unauthorised overdraft