Where to withdraw cash from?

gerardflanagan

Hi

If I have 20k in santander 3% account and £15k in my 2014/15 cash isa, which should I withdraw cash from? I gather I should look to leave my isas full but the isa is earning me less interest (even after tax) than santander. Surely I should always withdraw from my isa first then?

YorkshireBoy

How much cash?
What's the ISA rate?
Will you be able to subscribe £15K each and every year from now on?

atush

And why cash isa instead of S&S isa?

I'd generally spend the cash getting a lower interest rate.

gerardflanagan

YorkshireBoy wrote: »

How much cash?
What's the ISA rate?
Will you be able to subscribe £15K each and every year from now on?

Probably a few hundred pounds every few months. I'm imagining there might be a time I need to pay for a holiday or something so need more than my monthly income.

The coventry ISA I intend to use rate is 2.25% fixed over four years (effective 1.51% 1.88% 2% 2.25% if I withdraw in the 1st, 2nd, 3rd or 4th year)

No. I would guess after this year I will only be able to fill 5-10k a year.

atush wrote: »

And why cash isa instead of S&S isa?

I'd generally spend the cash getting a lower interest rate.

I had a quick read of the S&S MSE isa guide and it looked liked I wouldn't benefit from it any more than just investing the S&S normally.

Archi_Bald

gerardflanagan wrote: »

I had a quick read of the S&S MSE isa guide and it looked liked I wouldn't benefit from it any more than just investing the S&S normally.

This doesn't make sense, I'm afraid. Have a read of this thread https://forums.moneysavingexpert.com/discussion/5164774


Also, your answer doesn't actually address the question which was why cash isa instead of S&S isa

jimjames

Archi_Bald wrote: »

This doesn't make sense, I'm afraid. Have a read of this thread https://forums.moneysavingexpert.com/discussion/5164774


Also, your answer doesn't actually address the question which was why cash isa instead of S&S isa

Particularly if the money is being tied up for a number of years.

A cash ISA doesn't really sound suitable if its money you're looking to use soon. Far better to get up to 5% in current accounts like the Santander one

YorkshireBoy

jimjames wrote: »

A cash ISA doesn't really sound suitable if its money you're looking to use soon. Far better to get up to 5% in current accounts like the Santander one

Agreed. And setting aside the 5% and 4% accounts available (which, with a couple of hoops jumped through, would take £9.5K of the £15K), OP could open 3 x BoS Vantage accounts for the same rate as they're getting at Santander...with the added benefit of up to £6K of withdrawals before affecting that 3% rate (paid on £3-5K per account).

gerardflanagan

Archi_Bald wrote: »

This doesn't make sense, I'm afraid. Have a read of this thread https://forums.moneysavingexpert.com/discussion/5164774


Also, your answer doesn't actually address the question which was why cash isa instead of S&S isa

Thanks. I've given it a read. It seems from that the main benefit is long term, for when I might be subject to CGT. I anticipate having to empty all of my ISAs in the next 5 years for a deposit on a house. So I don't think that's something I'll benefit from?

I've chosen a cash ISA because I will benefit every year I'm in it, even if I withdraw from it after a year (as far as I can tell).

jimjames wrote: »

Particularly if the money is being tied up for a number of years.

A cash ISA doesn't really sound suitable if its money you're looking to use soon. Far better to get up to 5% in current accounts like the Santander one

This is what I have:
santander 123: 20k at 3%
lloyds club: 5k at 4%
lloyds club saver: will fill at £150per month at 4%. Will top up if I have spare
15k left to put in ISA

YorkshireBoy wrote: »

Agreed. And setting aside the 5% and 4% accounts available (which, with a couple of hoops jumped through, would take £9.5K of the £15K), OP could open 3 x BoS Vantage accounts for the same rate as they're getting at Santander...with the added benefit of up to £6K of withdrawals before affecting that 3% rate (paid on £3-5K per account).

I've tried to read everything on MSE guides today but haven't seen that mentioned. Is it new?

Do you all have your money perfectly spread out to max these accounts. I'm thinking it may be a struggle for me to keep track of it all if I take advantage of every account and end up having 10 or so. Do you know what I mean?

jimjames

gerardflanagan wrote: »

Do you all have your money perfectly spread out to max these accounts. I'm thinking it may be a struggle for me to keep track of it all if I take advantage of every account and end up having 10 or so. Do you know what I mean?

You've not listed Nationwide or TSB that pay 5% and with less conditions than some of the other accounts.

You're right though, managing 10 accounts is more effort than just bunging it in ISA.

Really depends if you want to earn 4%/5% or the ISA rates you've found.

If it is money for house deposit then yes an S&S ISA isn't the right thing to do.

enthusiasticsaver

If you have the Coventry fixed term isa maturing 1.11.18 ( I have that one too) then surely you cannot just withdraw a few hundred every month? I think you can close it with 120 days loss of interest and I understand why you think you should withdraw from that first but it will cost you £110.95 in interest. You also have to find somewhere to put the £15k which would mean either opening another Santander 123 account or finding other current accounts paying high interest to put it.

gerardflanagan

Oh, I didn't realise you had to close the whole account. Maybe I should just withdraw from Santander then? The alternative would be to get an easy access ISA at 1.5% but if I still have the 15k after a year (likely), I wouldn't get the effectively increased interest rate I'd get from the coventry in subsequent years.