£ in and out of cash isa

colsten

With £10K, I wouldn't go near the Santander 123 as it is hard, or even impossible, to make 3% from it. Instead I'd use:

- £2,500 FlexDirect 5% for 12 months
- £2,000 TSB 5%
- £6,000 Tesco (2 accounts) 3%

The FlexDirect and the TSB give you access to 5% monthly savers, into which you can put a total of £750 a month. So you could gradually move money from your Tesco accounts into those monthly savers. Thereby making almost 5% on all your money for the next 12 months.

Before the 12 months is up, review your accounts and re-jig as needed. Although you need to keep an eye on interest rates and special offers anyway throughout the year.

sharpe106

jimjames wrote: »

If you have £10k of savings then the limit is irrelevant. If ISA rates do ever increase then you can plonk it straight back in as you have a new allowance come April. The allowance is £15240 EVERY year so after 10 years you could put £152400 in - how many people have that sort of savings.

When many people posting recently are saving for house deposits in a cash ISA then the long term benefits are also completely irrelevant - if you are spending money in the next few years then you should be getting the best possible rates on it, not chasing tax benefits that will lose you money.


Down to you really. I get over 5% on all my savings of £10k with 4 accounts at 2 banks, it's really no hassle at all to setup. I'm also unsure where you get the idea that limited withdrawals, these are current accounts and you have more access to money for moving it than any cash ISA. Not only internet banking but mobile app as well as VISA debit card.
I'd describe that as far more flexible but each to their own.

The ISA allowance is also per person so if married that 30,000 a year so on 10,000 saving I would not worry about it and go with the bank accounts, it may take a couple of hours to set up fully but be worth it over the year

sharpe106

colsten wrote: »

With £10K, I wouldn't go near the Santander 123 as it is hard, or even impossible, to make 3% from it. Instead I'd use:

- £2,500 FlexDirect 5% for 12 months
- £2,000 TSB 5%
- £6,000 Tesco (2 accounts) 3%

The FlexDirect and the TSB give you access to 5% monthly savers, into which you can put a total of £750 a month. So you could gradually move money from your Tesco accounts into those monthly savers. Thereby making almost 5% on all your money for the next 12 months.

Before the 12 months is up, review your accounts and re-jig as needed. Although you need to keep an eye on interest rates and special offers anyway throughout the year.

I agree with only 10,000 I would not use the Santander but with 10,000 in the account you will get the 3%, atlhough the increase in fee will make quite a dent into the interest rate you get now, but if you have a few bills that need paying the cash back on those could still be worth it, even ignoring the mortgage cash back the cash back I get on general bills about equals the £5 a month

colsten

Not sure what the general favouritism for / obsession with the Santander 123 is all about. Why settle for potentially less than 3% (because of the fee) when you have oodles of options for 4, 5, 6 and real 3% accounts, none of which come with a mandatory fee.

I have the 123 myself but only because I have exhausted all the better accounts already, and it would be the first account to go if I reduced my cash balance.

darkidoe

colsten wrote: »

Not sure what the general favouritism for / obsession with the Santander 123 is all about. Why settle for potentially less than 3% (because of the fee) when you have oodles of options for 4, 5, 6 and real 3% accounts, none of which come with a mandatory fee.

I have the 123 myself but only because I have exhausted all the better accounts already, and it would be the first account to go if I reduced my cash balance.

Say if you were to dip into the Santander Balance, at what balance would you say the interest and DD cashback is just not worth it anymore? £10 000? I am asking because I will be dipping into the cash balance soon but still keen to keep the account because I know I will fill the cash balance back up within a years time..

I think the appeal of the Santander is its versatility, the 'interest' on large balance, cashback on DDs, relatively low monthly pay in requirements. It's just easy to understand.

catoutthebag

I should clarify
I'll use 3% santander for my 7k that I've saved for my tax return...money will go in regularly and out in Jan and July.

I'll spread 10k across some of the other mentioned above

colsten

Personally, I would only ever use the 123 once my "permanent" and "transient" savings exceed around £45,000, and if I would make more interest in a 123 than anywhere else. "Permanent" is what I keep in current accounts, "transient" what goes into Regular Savers.

Presently, you can easily put £30,000 into non-Santander current accounts, plus over £23,000 into Regular Savers which are easily accessible for most people. In addition, there are some other Regular Savers that have limited access, such as KRBS, Nottingham BS etc.

You need to do some numbers in a spreadsheet that reflects your own circumstances. You will find that, for example, drip-feeding from a simple 1.5% Tesco savings account (in which you would get interest on more than £20K) into a 5% Regular Saver can pay you quite a bit more in interest than if you kept your money in a 3% current account. This is particularly true if your 3% current account comes with a whopping £60 a year charge.

jimjames

colsten wrote: »

Not sure what the general favouritism for / obsession with the Santander 123 is all about. Why settle for potentially less than 3% (because of the fee) when you have oodles of options for 4, 5, 6 and real 3% accounts, none of which come with a mandatory fee.

I can understand why some people would want to use the 123 for simplicity if they had £20k. You or I may be happy to operate multiple accounts but I know others aren't. Even just using that account would still give a vastly better return than a cash ISA and any current account that doesn't pay interest.

pavane

catoutthebag wrote: »

But when an isa becomes the best option and you have thousands saved in whatever 5 or 6% current account with lots of annoying hoops to jump through like having existing product with them or transferring whatever amount every month etc, then you come to open an isa, you can only put x limit in?

It is not so much hoops, those accounts also have limits or mature, but that ISA allowance is use it or lose it. Usual suspects on this forum will always rubbish ISA, if you are putting away for longer term when rates will rise it makes sense.

This isn't what you're doing.

As usual, a question about ISA has become a discussion on current and regular savings accounts.

colsten

I am writing for those who are ambitious, not to encourage people to have low expectations.

jimjames wrote: »

I can understand why some people would want to use the 123 for simplicity if they had £20k. You or I may be happy to operate multiple accounts but I know others aren't. Even just using that account would still give a vastly better return than a cash ISA and any current account that doesn't pay interest.