Where to withdraw cash from?

Archi_Bald

gerardflanagan wrote: »

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).

You are right, you wouldn't really benefit from an S&S ISA as you are planning to need cash in the next 5 years (something you didn't reveal initially).

You are wrong that you benefit from cash ISAs every year. On current interest rates, you will be able to make more money from interest paying current accounts and from Regular Savings accounts. This holds true for up to around £50K. How much are you planning to need for your deposit?

gerardflanagan

I have about 50k at the moment (because of another 11k in old isas that I hadn't mentioned above). I intend to keep saving for a deposit at about £2k a year. I may either buy in London with a partner (would need about £100k deposit) or outside of London with whatever 50k+ I have.

I've looked at other interest paying current and regular savings accounts and it looks like I'd have to manage quite a lot of accounts to make it work (e.g. there are a lot at £2k max etc.). So maybe the 15k isa will be slightly less interest but also less overhead?

enthusiasticsaver

gerardflanagan wrote: »

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.

Yes it depends very much on how long it has been invested in the Coventry whether you would get the whole £15k back, presumably it is not that long as I am getting 2.4% for 4 years on my Coventry BS fixed rate isa which was opened in October 2014. I see that it is 2.25% for those opening it now so assume you only recently opened it?


If you only need a few hundred every few months then I would take it out of the current account then you won't pay the penalty or have to find a home for the rest of your £15k although as others have said you can get 4 or 5% in some current accounts but you need to open quite a few. It will take you quite a few months to make up that £110 interest penalty.


I must admit to liking a simple life so have just stuck to 2 Santander 123 accounts

YorkshireBoy

gerardflanagan wrote: »

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

It's not new, but hasn't really been pushed my MSE (in either the articles or in the weekly email)...probably why it's both still around and also allowing 3 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.

3 x BoS is probably one of the easiest set ups...


- £5K in each account
- £1,000 internal SOs to satisfy funding requirements
- Mental notes to self:
1. Don't drop below £3K in each (if at all possible), and
2. If you make a significant withdrawal, don't forget to cancel the SO(s).


Job done (other than creaming off around £29 interest each month!)

gerardflanagan

enthusiasticsaver wrote: »

I must admit to liking a simple life so have just stuck to 2 Santander 123 accounts

How do you get two?! Is that allowed?

YorkshireBoy wrote: »

It's not new, but hasn't really been pushed my MSE (in either the articles or in the weekly email)...probably why it's both still around and also allowing 3 accounts.3 x BoS is probably one of the easiest set ups...


- £5K in each account
- £1,000 internal SOs to satisfy funding requirements
- Mental notes to self:
1. Don't drop below £3K in each (if at all possible), and
2. If you make a significant withdrawal, don't forget to cancel the SO(s).


Job done (other than creaming off around £29 interest each month!)

Ok, thanks. I'll have a look.

LXdaddy

When considering which account to take a witdrawal from you should look at interest rates and any restrictions on withdrawal. Some of the accounts you mention carry a penalty if you make a withdrawal. If you want to take say £10,000 out of your accounts for a purchase you could calculate how much interest leaving £10K in each potential account would add for the coming year, add on the value of any withdrawal penalty and that will give you the "cost" of using the funds from that account.

Say you have a Santander 123 account with sufficient cash earning 3% gross and an ISA earning 2%.

If you are a standard rate tax payer the nett interest rate on Santander 123 is 2.4%. If there is no penalty on the ISA withdrawal it is better to lose 2% interest than 2.4% so withdraw from ISA.

BUT, if the ISA has a 90 day loss of interest penalty you would lose (almost) an extra quarter of a year's worth of interest making the loss 2.5% so in that case withdraw from Santander.

Eco_Miser

gerardflanagan wrote: »

another 11k in old isas that I hadn't mentioned above

So, why not withdraw cash from one of those? Still getting 5% could be a reason, but otherwise why consider taking from a new FRISA in preference.

enthusiasticsaver

gerardflanagan wrote: »

How do you get two?! Is that allowed?

I have a sole account in my name and a joint one with my husband. If you are married/have a partner that is the only way you can get 2.

badger09

enthusiasticsaver wrote: »

I have a sole account in my name and a joint one with my husband. If you are married/have a partner that is the only way you can get 2.

Not strictly true. You can have a joint account with someone who isn't your spouse/partner

enthusiasticsaver

badger09 wrote: »

Not strictly true. You can have a joint account with someone who isn't your spouse/partner

Yes I guess you could but I would not consider sharing a joint account with that sort of money with anyone other than a partner or spouse. You would have to know someone pretty well to share that sort of financial dealing. Some may view it differently I suppose.