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Savings shake-up, ISA or not?

I currently have some savings, totalling £6800 which are spread between two Nationwide ISA's:

Instant ISA Saver 2 - £4800 with a rate of 1.4%, due to drop to 1.00% after June.

Help to Buy ISA - £2000 with a rate of 2.00%

I have about £300 spare each month to put into savings.

The HTBISA I am most likely going to leave alone. I put in the max £200 per month and the rate of 2% I am happy enough with.

Anything over that, I put into the other one as Nationwide allows both to run at same time.

I am thinking of putting the extra £100 or so into a regular saver instead, I bank with HSBC and their offers 4%.

I was looking for advice on what I do with the £4800 lump sum Ive built up in the ISA, as it will be earning just 1% soon enough. I don't really want it locked away for 5 years in order to get a decent rate, maybe 1 year as long as its a better deal than simply leaving it where it is?

Any advantage to using a Fixed Rate ISA locked away for a year, compared to bringing it out into a 'normal' savings account? Surely all savings now are tax free so the need to keep the wrapper around your ISA savings no longer apply?

Any advice appreciated.

Replies

  • Archi_BaldArchi_Bald Forumite
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    ducksoup wrote: »

    I am thinking of putting the extra £100 or so into a regular saver instead, I bank with HSBC and their offers 4%.
    Nationwide's pays 5%, allows double the monthly amount and has no withdrawal restrictions.

    Nationwide and others also have current accounts that pay interest.
    ducksoup wrote: »
    Any advantage to using a Fixed Rate ISA locked away for a year, compared to bringing it out into a 'normal' savings account? Surely all savings now are tax free so the need to keep the wrapper around your ISA savings no longer apply?
    Not all savings are tax free. A BR tax payer can earn £1,000 interest a year tax free.

    If you have less than the annual ISA allowance in total savings,any cash ISA in addition to your H2B one more or less means you are throwing money away.
  • Archi_Bald wrote: »
    Nationwide's pays 5%, allows double the monthly amount and has no withdrawal restrictions.

    Nationwide and others also have current accounts that pay interest.

    Not all savings are tax free. A BR tax payer can earn £1,000 interest a year tax free.

    If you have less than the annual ISA allowance in total savings,any cash ISA in addition to your H2B one more or less means you are throwing money away.

    The 5% Nationwide regular saver is dependant on you having one of their FlexPlus current accounts. Also I the max I will be putting into this regular saver is around £100.

    My current account is with HSBC and it shall remain so as I do not wish to be credit scored. I am aware of the high interest current accounts, but avoiding any searches on my credit file for the time being.

    And yes, not all savings are tax free but I am pretty sure I will not be earning over £1000 in interest this year... therefore comfortably within my PSA threshold enabling me to concentrate on a wider range of savings as opposed to just ISAs.
  • bigadajbigadaj Forumite
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    ducksoup wrote: »
    The 5% Nationwide regular saver is dependant on you having one of their FlexPlus current accounts. Also I the max I will be putting into this regular saver is around £100.

    My current account is with HSBC and it shall remain so as I do not wish to be credit scored. I am aware of the high interest current accounts, but avoiding any searches on my credit file for the time being.

    And yes, not all savings are tax free but I am pretty sure I will not be earning over £1000 in interest this year... therefore comfortably within my PSA threshold enabling me to concentrate on a wider range of savings as opposed to just ISAs.

    The nationwide regular saver is open to those with any flex account product, so flex direct and flex account so long as you circulate £750 a month through it. £1200 on the regular saver per annum at £100 a month would gross £30 so only a tenner better than your hsbc option.

    However it's bery worthwhile having a second current account, systems go down and issues arise which make a spare account very useful. HSBC are garnering a reputation for closing accounts on these boards as well.
  • AnotherJoeAnotherJoe Forumite
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    ducksoup wrote: »
    The 5% Nationwide regular saver is dependant on you having one of their FlexPlus current accounts. Also I the max I will be putting into this regular saver is around £100.

    My current account is with HSBC and it shall remain so as I do not wish to be credit scored. I am aware of the high interest current accounts, but avoiding any searches on my credit file for the time being.

    The paranioa on these boards about credit searches is frightening. If one search over a year or two (when are you planning to buy?) will tip you over, you are surely going to have a problem anyway. Just get a Club Lloyds or similar high interest account for the £4800.
  • ColdIronColdIron Forumite
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    I don't think it's any worse than applying for any credit, such as a mobile phone contract
  • ducksoup wrote: »
    Help to Buy ISA - £2000 with a rate of 2.00%

    I have about £300 spare each month to put into savings.

    The HTBISA I am most likely going to leave alone. I put in the max £200 per month and the rate of 2% I am happy enough with.

    Why settle with 2%? Why not transfer to Halifax or Santander which are running at 4%?
    I work in the financial services industry but I am not a financial adviser. I do not give financial advice. Anything I say here is for discussion purposes only and should not be construed as advice.
  • MDMDMDMD Forumite
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    Atreyu107 wrote: »
    Why settle with 2%? Why not transfer to Halifax or Santander which are running at 4%?
    Although you may need to be quick as there is a rumour the Halifax rate may drop on Tuesday:
    http://forums.moneysavingexpert.com/showthread.php?p=70588566
  • As above look at better HTB ISA rates, use MSE main site,

    Upgrade to HSBC advance account and RE =6% max £250 pm

    Have you considered investing (not saving I know) with a S&S ISA?

    Your lump sum try TSB 5% max £2K current account &/or Lloyds 4% max £5K current account as well as alternative suggestions above.

    Great to see you benefiting from compound interest rates and saving for your future.
    Debt is a symptom, solve the problem.
  • Westie983Westie983 Forumite, Ambassador
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    MDMD wrote: »
    Although you may need to be quick as there is a rumour the Halifax rate may drop on Tuesday:
    http://forums.moneysavingexpert.com/showthread.php?p=70588566

    Its not a may, it is dropping on Tuesday, current holders of the H2B will keep the 4% rate for now.
    I’m a Forum Ambassador and I support the Forum Team on the Banking & Borrowing, and Reduce Debt & Boost Income boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing [email protected] All views are my own and not the official line of MoneySaving Expert.
    Save 12k in 2022 #18 Total (£5000) £4250.00/£5000 = 85.00%
    Sealed Pot Challenge ~ 16 #24 Total (£300) £0.00/£500 = 0.00%
    Xmas 2022 £1 a Day #13 Total (£246) £85.00/£365 = 23.28%
    Virtual Sealed Pot #1 Total (£500) £500.00/£500 = 100.00%
    £2 Savers Club 2022 #8 Total (£4.00) £25.00/£300 = 8.33%
    Total £4860.00/£6665 = 72.91%
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