Real noob question about ISA deposits.

riverboat2001

Hi All,

I've got 20K in Santander 123 account.

I want to start putting some money away in ISA's, now where I'm confused is, does it matter if i put the money in the ISA on the first day it opens or on the last day?
Do i still earn as much interest?

Archi_Bald

A cash ISA, which you appear to be talking about, is essentially a savings account, albeit with special tax treatment of the interest. There is no magic - - you get paid interest for every day you have money in the account. If you have no money in it, you get no interest.

As there is basically no cash ISA that pays anything like the interest you get in your 123, you would not want to put a penny into a cash ISA before the very end of the financial year at the very earliest.

What is your objective for putting money into an ISA? How much do you want to put into an ISA, what sort of an ISA, and for how long?

riverboat2001

Don't really know too much about it, but I about £500 extra that i can save each month.
I do have some cash invested in Zopa/Funding Circle/Ratesetter, that is put aside for about 1 year, maybe more, not sure when i'll need the money.

But everybody goes on about ISA's, so they seemed sensible.
I was going to set up a D/D for £500. Won't need the money for at least a year, so no instant access required.

innovate

12 x £500, £6,000, is less than half of the 2014/15 ISA allowance, so you can deposit it into an ISA next year, or even the year after, and in the meantime enjoy much better interest rates than you would be getting in any ISA. Start by opening 2 TSB Plus accounts, and add some others as needed. Move 2 x £2,000 from your 123 into each of the TSB accounts and consider a Club Lloyds account, as well as a Club Lloyds Monthly Saver. May be also look into a First Direct Regular Saver, as well as a Halifax Reward account. You'll find threads about all these on the forum.

Ignore the hype about cash ISAs.