Question on changing banks and ISAs

Thomson1000

Hello all,

Firstly thank you for being such a helpful and kind community. My issue:

I went to Santander yesterday to set up a 123 account to be maxed out to the £20,000 and use it really as a savings account. Whilst there I discovered that pretty much all their accounts and general sevice is better than Lloyds so I'm set to make the entire shift.

My question though is this: in order to max out the 123 account to get the best deal on it, I'd have to eat into my ISA account. I've maxed this out over the last 5 years. Obviously if I transfer money out of it, it will lose it's tax free status. Is this better in the long run, as I'll get more on the 3% than I would in a the 0.8% ISA interest savings? Or is it worth keeping tax free money in the long haul?

grumbler

A recent thread: Removing Cash from ISA

badger09

Thomson1000 wrote: »

Hello all,

Firstly thank you for being such a helpful and kind community. My issue:

I went to Santander yesterday to set up a 123 account to be maxed out to the £20,000 and use it really as a savings account. Whilst there I discovered that pretty much all their accounts and general sevice is better than Lloyds so I'm set to make the entire shift.

My question though is this: in order to max out the 123 account to get the best deal on it, I'd have to eat into my ISA account. I've maxed this out over the last 5 years. Obviously if I transfer money out of it, it will lose it's tax free status. Is this better in the long run, as I'll get more on the 3% than I would in a the 0.8% ISA interest savings? Or is it worth keeping tax free money in the long haul?

Do you have a Club Lloyds account and Club Lloyds Monthly Saver? If not, why not?

I wouldn't sever all ties with Lloyds when I could get 4% on up to £5k in my current account, and on another £400 per month;)

jimjames

Thomson1000 wrote: »

Obviously if I transfer money out of it, it will lose it's tax free status. Is this better in the long run, as I'll get more on the 3% than I would in a the 0.8% ISA interest savings? Or is it worth keeping tax free money in the long haul?

Two points:


1) I'd say it's best to get the highest rate you can on your money and that rates are unlikely to rise much, if at all, over the next 5 years.


2) For long term money you are likely to be better off investing it via a S&S ISA than holding as cash. Short term money should always be cash and for that it makes sense to get the best rate rather than worrying about long term tax status.

colsten

badger09 wrote: »

I wouldn't sever all ties with Lloyds when I could get 4% on up to £5k in my current account, and on another £400 per month;)

Agree, particularly since Santander have nothing that comes even close to these