Santander account or keep ISA

pothole50

I have had a windfall of £3000 and wondered if it would be better for me to either add it to my Isa or to open a Santander Account.

I was thinking of closing my Barclays Isa redrawing the £2000 adding that to the £3000 and open a Santander deposit account where my £850/month wages would be paid into.

My question is would I get more interest doing it this way, or should I just add it to my Isa, I am a taxpayer.

Mojisola

How much interest are you getting from the ISA?

pothole50

I am getting 1.5%

bigadaj

Looks to be Santander as the best option. Slightly less than 3% interest subject to tax, so 2.4% at standard rates , which obviously beats 1.5%. You lose the isa allowance but as this is now £15000 per year then shouldn't be a major factor Unless you might have exceed this now or in future years.

Might also be better from next year with the tax free part of the savings interest that the Tories are implementing.

xylophone

See http://www.moneysavingexpert.com/news/banking/2015/02/should-i-save-in-santanders-123-account-or-put-the-money-in-a-cash-isa

TomJ

Personally, I'd stick it in the 123 until the second budget clarifies what's happening with ISAs in Autumn. If they stick to their guns, you'll be able to withdraw from an ISA down to it's lowest limit, stick into a higher interest account, then put it back in, along with the current year's remaining allowance, on Apr 5 and put it back into higher interest accounts on Apr 6 without losing your accumulated allowance.

badger09

bigadaj wrote: »

Looks to be Santander as the best option. Slightly less than 3% interest subject to tax, so 2.4% at standard rates , which obviously beats 1.5%. You lose the isa allowance but as this is now £15000 per year then shouldn't be a major factor Unless you might have exceed this now or in future years.

Might also be better from next year with the tax free part of the savings interest that the Tories are implementing.

Not quite, unless you can cover the £2 monthly fee with cashback on DDs, which is easily done.

Agree in principle though

badger09

Or a TSB Classic Plus and a Nationwide Flexdirect?

jimjames

badger09 wrote: »

Or a TSB Classic Plus and a Nationwide Flexdirect?

Or Lloyds at 4%.

Any of those will beat an ISA at 1.5% especially for an amount of £5k