Virgin eISA rate dropping, any alternative?

Lungboy

Good afternoon,
I've just had an email from Virgin Money saying that the interest rate on their eISA Issue 5 is soon to drop from 1.75% to 1.5%. Is there anything that can beat that at the moment that accepts transfers and isn't tied to a current account? I'd like to keep it tax free really, rather than sticking it in a current account or 3.
Thanks.

Archi_Bald

May I ask how much is in your ISA, and how much new money you are planning to add this year? Also, when are you planning on spending some/all of your ISA money?

Lungboy

~£10K, hopefully the full £15K, no plans to spend it for the forseeable.

Archi_Bald

So you are talking about £25Kish by next April. There is nothing much exciting in terms of cash ISAs for this amount of money, I'm afraid. If you reject current accounts, you'll be pretty much left with

• either losing money in ISAs that pay interest at a rate below inflation
• or starting to look into S&S ISAs, using low-cost funds on a low-cost platform
• or a combination of the two

You could take a chance with a fixed rate cash ISA, where rates look a bit better right now but you might regret this if the rates go up in a year or two. Any longer term approach should really include an S&S ISA.