new PSA allowence

jimjames

jrsga wrote: »

Hi

I have a savings account paying 1.31%
I also have a cash ISA paying 1%
Now that PSA has arrived is it worth depositing this years ISA allowance from the savings account into the ISA or leave it in the savings account?

Can someone enlighten me which is worth doing and if there is a crossover point at which its best to leave it in one or the other?

thanks

Whichever is the higher rate is the one to keep.

By my calculator 1.31% is higher than 1% so no point using the ISA. But I assume you realise you can do far better than 1.31%?

james3333

hi, i have opened x2 tesco current accounts, paying 3% on each, so total of 6%...im putting 3k in each....nice
took 5 mins to do online:money: not too good if you have more than 6k to put in tho....

james3333

badger09 wrote: »

Are you (and your fiancee) first time buyers by any chance? If so a Help to Buy ISA exch, with someone like Santander, would be a good choice for some of your savings;)

unfortunaley not, but opened x2 tesco current accounts, so get 6% on the savings....

jimjames

james3333 wrote: »

unfortunaley not, but opened x2 tesco current accounts, so get 6% on the savings....

Unfortunately it doesn't work like that. The rate is 3%

jrsga

Whichever is the higher rate is the one to keep.

By my calculator 1.31% is higher than 1% so no point using the ISA. But I assume you realise you can do far better than 1.31%?


Thanks for the reply.

I assume you mean santanders' 3% account? Is there a credit check to open one of these?

So then what is the point of me having an ISA with a large amount in it anymore?

thanks

xylophone

So then what is the point of me having an ISA with a large amount in it anymore?

If you are married, you might be thinking of your spouse's situation should you pre-decease him/her.

http://moneyfacts.co.uk/guides/isas/inheriting-isas--the-new-rules/

You might be looking at the possibility of interest rates rising in the future.

You might have savings interest well in excess of the personal allowance that you would wish to protect from tax...

A person with a modest income only equivalent to his tax allowance might have income of several thousand pounds from ISA as well as a high savings income from other sources - a number of pensioners could be in this position.

Everybody needs to examine his own tax situation and decide accordingly.

james3333

jimjames wrote: »

Unfortunately it doesn't work like that. The rate is 3%

REALLY!!??... why?
im putting my money into 2 seperate accounts...im sure i heard martin lewis recommend doing it this way!!??

colsten

james3333 wrote: »

REALLY!!??... why?
im putting my money into 2 seperate accounts...im sure i heard martin lewis recommend doing it this way!!??

Martin Lewis will never have suggested that putting money into two different accounts would double the interest rate of either account, or the interest rate that you get.

The current interest rate for the Tesco current accounts is 3% AER. This means:

• If you have 1 Tesco account, you can get 3% AER on up to £3,000.
  
• If you have 2 Tesco accounts, you can get 3% AER on up to 2 x £3,000 = £6,000.

james3333

colsten wrote: »

Martin Lewis will never have suggested that putting money into two different accounts would double the interest rate of either account, or the interest rate that you get.

The current interest rate for the Tesco current accounts is 3% AER. This means:

• If you have 1 Tesco account, you can get 3% AER on up to £3,000.
• If you have 2 Tesco accounts, you can get 3% AER on up to 2 x £3,000 = £6,000.

yes, so if i split my 6k into two accounts (3k in each) i will get 3% on both 'lumps'....?

jimjames

james3333 wrote: »

yes, so if i split my 6k into two accounts (3k in each) i will get 3% on both 'lumps'....?

Yes. But 3% on £1 and 3% on another £1 is not 6%.