Nisas v santander 321

chalks5036

I currently have a 321 account which is paying 3% on anything over £3000 but feel I should be taking advantage of the new NISA rules however cannot find any cash NISA that pays anywhere near the rate I am getting with Santander - am I missing something - not very savvy when it comes to investing

bsms1147

Nope, it's that simple. At the moment ISA rates are poor so for most people current accounts with their relatively higher rates are a better choice.

(n.b. you're talking about cash ISAs, which would be termed saving rather than investing).

Stubod

..Hi Chalks,

..we have one of each,and this year we took advantage of the Santander 2.3% ISA (2yr fixed), as this works out more or less the same as the 123 (ie after basic task).

I must admit, the increase in ISA/NISA limits this year has given me a different outlook towards them. Under the old rules/amounts, there was a real incentive to try and save enough to do one each year as the amount was just about "do able", and gave a good incentive. The new amounts are way to high for me to be able to save in a year. So while the rates are low I will be sticking to the best rates I can find whether ISA or not. Then if the NISA rates do improve you have still got £15k to go at each year...ie could save in an "ordinary" account for 3 years, and still only have enough to fund one NISA if the rates improve.

I guess what I am saying regarding your question is how much are you likely to be able to save....if its less than £15k, then going for the Santander 123 is a no brainer as you can always move it over next year if the rates have improved elsewhere. Although the Santander costs a couple of quid a month, it more than compensates for any cash back on DD's, and is still probably the best "savings" account for your cash at the mo....and despite earlier problems I now find Santander a very good bank to deal with...

Archi_Bald

Stubod wrote: »

I guess what I am saying regarding your question is how much are you likely to be able to save....if its less than £15k, then going for the Santander 123 is a no brainer

Your conclusion is generally eminently sensible - though from a best return point of view, you should consider exploiting the 4 and 5% current accounts as well a 4 and 6% regular savings accounts before you commit money to the 123.

jimjames

chalks5036 wrote: »

I currently have a 321 account which is paying 3% on anything over £3000 but feel I should be taking advantage of the new NISA rules however cannot find any cash NISA that pays anywhere near the rate I am getting with Santander - am I missing something - not very savvy when it comes to investing

Sadly it looks like you've been misled by the likes of articles on MSE that promote the concept of using your ISA allowance at all costs.

That may have been true 5 years ago but it certainly isn't now. The best returns are from current accounts and there is no point in using a cash ISA for small amounts of new money. It could still be worth keeping a cash ISA if you have over £15,000 of money already in an ISA and is almost certainly worth using a S&S ISA.

No instant cash ISAs pay anywhere near the return on the 123 account and certainly nothing near the 5% on TSB accounts.

eskbanker

jimjames wrote: »

Sadly it looks like you've been misled by the likes of articles on MSE

....and also subliminally influenced by Ted Rogers?

butterflymum

....and also subliminally influenced by Ted Rogers?

:rotfl:I was just thinking the same thing.