123 CA better than ISA

kkevin86

Hey everyone,

I'm just trying to do some quick calculations on whether it is better to open up a 123 CA and pay in £20k to get the gross 3% interest, or put £15000 in an ISA.

But I don't see any particularly great easy access ISA deals at the moment - yes, there's the 2.33% AER but you can only put monthly deposits of £1250 in so you will lose a bit. And then the next best options are 1.5%. So surely it's better off to go with the 3% gross interest?

Any advice would be much appreciated.

westy22

Most people on here are putting money into high interest current accounts rather than cash ISAs - particularly if you are a BR taxpayer.

If you want to shelter it away into an ISA you could always do that just before the tax year end at the end of March 2015.

jimjames

Or go for 5% with TSB & Nationwide current accounts for the first portion of it.

kkevin86

Thanks guys for the responses. Yeah i'm thinking about using the TSB account for initial portion - only negative is just having so many accounts! Already have 3 CAs! Will go with the 123 at santander as well then.

dale_cotterill

westy22 wrote: »

If you want to shelter it away into an ISA you could always do that just before the tax year end at the end of March 2015.

This I think is the important thing.

You really don't want to miss your ISA allowance for a year, especially if you intend on saving near enough the max amount.

Interest rates may be low now but it's far better to have 3 years worth of ISA subscriptions to transfer in when they rise rather than starting from there.

By all means at the moment wait as long as you can to put it in, but try and ensure you don't miss out entirely.