A little confused what to do....halifax

2015newstart

I opened a 14/15 variable saver isa with the Halifax in July and it's currently 1.45%. I've spoken to the Halifax and this rate will drop to 1% in July but then I can fix or swop to another deal then.

I'm stuck as what to do, do I transfer the £1600 I have into a new isa tomorrow (15/16) or continue paying into the halifax one and just hope rate picks up? I'm not keen on the idea of being tied with them for another year when the rate will drop in July.

Not sure what to do, it's the first isa I've had. Would appreciate your advice. Many thanks

Archi_Bald

If you have £1,600, you get 5% in a TSB Plus account. Current accounts pay a lot more interest than ISAs and look a much better choice for sums below £15K.

2015newstart

Thanks Archi Bald for your quick reply. I'd not thought of a current account, will have a look at them now.

EDIT - It's the min £500 every month to fund it that's going to be the problem. I'm going to be able to save £250-£350 a month so rules out the tsb option.

YorkshireBoy

2015newstart wrote: »

EDIT - It's the min £500 every month to fund it that's going to be the problem. I'm going to be able to save £250-£350 a month so rules out the tsb option.

You'll have £1,600 in there. You transfer £150-250 out, and then transfer £500 back in again. Where's the "problem"?

2015newstart

I didn't realise you can do that, i thought it would be a 'new' £500 every month. It's just a shame it's only unto £2000 and but then no interest. I'm hoping to hit the 2k in 2months, so would be just moving the money in and out every month. It's definitely an option, but to be honest I like the idea of it being away and untouchable. We do have the 123 santander account, but I don't want to be able to say oooooh let's book a holiday. This money is the starts towards legal fees and stamp duty for when we move.

jimjames

2015newstart wrote: »

I didn't realise you can do that, i thought it would be a 'new' £500 every month.

It is a new £500 each month. How does the bank know where the money that is in your account has come from?

Archi_Bald wrote: »

If you have £1,600, you get 5% in a TSB Plus account. Current accounts pay a lot more interest than ISAs and look a much better choice for sums below £15K.

As above, an ISA is totally pointless at this sort of savings amount. You're already with the Halifax so combine the current account with a Halifax Reward and you'll boost your returns massively.

Transfer an account to Halifax as well and you'll add another £125 to that total as a one off payment.

Halifax reward pays £60 pa (£75 gross)
TSB 5% on £1600 = £80 pa (gross)

Total £155 pa on £1600 = 9.7% gross.

That 9.7% may be taxed but it's way, way more than any ISA is paying even after tax at the higher rate.

2015newstart wrote: »

It's just a shame it's only unto £2000 and but then no interest. I'm hoping to hit the 2k in 2months, so would be just moving the money in and out every month. It's definitely an option, but to be honest I like the idea of it being away and untouchable.

You refer to "we". If that's the case then you can have 3 accounts (1 each plus a joint one)

That will cover £6000. The Flexdirect for another £5000. How much more money are you saving?

No reason why you need to touch it, you can withdraw from an ISA easily too but surely it makes more sense to get best return if you have a goal in mind.

YorkshireBoy

2015newstart wrote: »

I didn't realise you can do that, i thought it would be a 'new' £500 every month.

It's a current account, not a regular saver!

It's just a shame it's only unto £2000 and but then no interest. I'm hoping to hit the 2k in 2months, so would be just moving the money in and out every month.

Nationwide FlexDirect pays the same rate on £2,500. Club Lloyds pays 4% on £4-5000. Other current accounts (BoS and Tesco) pay 3%, allowing a total of £21K. Why on earth would you want to save at circa 1%...even taxfree?

It's definitely an option, but to be honest I like the idea of it being away and untouchable.

Give the debit card and online banking details to a grown up for safe keeping then. But, seriously, I would have thought your objective was to maximise returns, rather than getting an account which compensates for your willpower issues?


Remember, we're talking 3-4 times the interest here...not just a little bit more!

2015newstart

YorkshireBoy wrote: »

Remember, we're talking 3-4 times the interest here...not just a little bit more!

That's certainly given me the wake up call I need 3 or 4% why I am even looking at 1%?

2015newstart

Thank you for your replies, you've given me the kick up the backside I need. I know I've been naive with the isa option and can't believe I wasted a year!

We don't bank with TSB, so the option of an account and a joint would sort all our savings option and now i see you can move the money across to credit each with £500 it's a great idea. I'll look at the higher rates like the club once the nest egg grows.

YorkshireBoy

jimjames wrote: »

Transfer an account to Halifax as well and you'll add another £125 to that total as a one off payment.

Just to expand on this a little bit more, it's entirely possible to make well over £1,000 between you in current account switching incentives over the next few months...and that's the equivalent of having £100,000 in your ISAs at 1% AER!

2015newstart

I'm starting to see that now YB.....need to actually open my eyes! Thank you x