Transfer my ISA into a current account?

jacknight

So another tax year comes and even worse ISA interest rates!

I'm considering transferring all of my ISA fund around 30k into 123 current accounts paying 3% (2.4% after tax).

On 30k that is an extra £270 a year based on the 1.5% ISA I can get with Santander.

Is there any reason why I shouldn't do this?

Thanks

masonic

Are you planning to significantly add to these savings over the coming year? Is this money you plan to use within the next few years?

YorkshireBoy

The 2nd 1-2-3 account will need to be a joint won't it?

jimjames

Do you need that much cash or could some stay in ISAs but S&S not cash?

Spidernick

jimjames wrote: »

Do you need that much cash or could some stay in ISAs but S&S not cash?

Agreed - I think the way forward is to use S&S ISAs wherever possible, especially once all interest for most people becomes tax free next year. Have enough cash as an emergency fund (however much you feel this needs to be), but in various current accounts paying good interest rates (and regular savings in Lloyds, etc.), but then put the rest into a combination of an S&S ISA and pensions (don't forget those!), depending on your particular circumstances.

jacknight

YorkshireBoy wrote: »

The 2nd 1-2-3 account will need to be a joint won't it?

Not that I am aware, I have had 2 before in my own name?

jimjames wrote: »

Do you need that much cash or could some stay in ISAs but S&S not cash?

I don't really want it to be tied away, as eventually I hope to use some of it to invest in a house and let it out. How long that will be I don't know as I'm finding hard to find the right property.

I haven't looked at stocks and shares much, but doesn't the money have to be tied away for many years?

Spidernick wrote: »

Agreed - I think the way forward is to use S&S ISAs wherever possible, especially once all interest for most people becomes tax free next year. Have enough cash as an emergency fund (however much you feel this needs to be), but in various current accounts paying good interest rates (and regular savings in Lloyds, etc.), but then put the rest into a combination of an S&S ISA and pensions (don't forget those!), depending on your particular circumstances.

What sort of return do you people get from S&S ISAs and how long must the money be tied up for? S&S is not really something I have looked into much before. I came across an appealing website the other day called NutMeg that get nice returns but they take 1% fee.

YorkshireBoy

jacknight wrote: »

Not that I am aware, I have had 2 before in my own name?

Maybe that was before they changed the T&Cs (last year?).

Speculator

YorkshireBoy wrote: »

Maybe that was before they changed the T&Cs (last year?).

Maybe.


I have two 123 a/cs in my own name and so does my wife.


Will be using it for our maturing Saffron Walden Regular ISA money.


T&Cs dated 16 October 2014 now says...



The maximum number of 1I2I3


Current Accounts is two; you may only hold one single and one joint 1I2I3 Current Account (or one of each).

jimjames

jacknight wrote: »

I haven't looked at stocks and shares much, but doesn't the money have to be tied away for many years?

You should be aiming for at least 5 years but it's not a fixed, set period and you can access money almost immediately if you want to but value does fluctuate.

If you're prepared for risk of BTL then S&S is also worth investigating. I'd avoid companies charging 1% as that will hit your return.

jacknight

YorkshireBoy wrote: »

Maybe that was before they changed the T&Cs (last year?).

Yes it must of been that.

jimjames wrote: »

You should be aiming for at least 5 years but it's not a fixed, set period and you can access money almost immediately if you want to but value does fluctuate.

If you're prepared for risk of BTL then S&S is also worth investigating. I'd avoid companies charging 1% as that will hit your return.

I don't think S&S are for me at the moment as I wouldn't have a clue what to invest in and don't have the time to study how to invest in S&S. Maybe one day!

So the question is should I ditch my ISA?

The only the bad thing I can see is if the ISA interest rate in the next year or two all of sudden decided to go above the current account interest rates.

No way to predict that right?

Alter_ego

jacknight wrote: »

Yes it must of been that.



I don't think S&S are for me at the moment as I wouldn't have a clue what to invest in and don't have the time to study how to invest in S&S. Maybe one day!

So the question is should I ditch my ISA?

The only the bad thing I can see is if the ISA interest rate in the next year or two all of sudden decided to go above the current account interest rates.

No way to predict that right?

Or the current account rate dropping- they are all variable, could even go to zero!