current acc savings or ISA savings

chanders

With the slashes in bank interest rates to ISA accounts (e.g. 0.25%) would you recommend transferring ISA savings into current accounts that offer slightly better interest rates?

Although ISA is tax free the interest rate is dismal, any advice much appreciated

xylophone

If your ISA is "flexible",you might consider moving out and in within the rules so as to keep ISA status if you wished?

http://www.moneysavingexpert.com/savings/flexible-ISAs

katejo

chanders wrote: »

With the slashes in bank interest rates to ISA accounts (e.g. 0.25%) would you recommend transferring ISA savings into current accounts that offer slightly better interest rates?

Although ISA is tax free the interest rate is dismal, any advice much appreciated

I have had similar thoughts. I have a non active ISA from the last tax year with around £6K in it. I don't want to lock it away anywhere as I need some of it within the next few months. I don't see the point of transferring it to another ISA as the rates are so low. I could just transfer some of it to a new current account (now that my savings there are tax free). I have no risk of exceeding the tax free limits.

molerat

If you can find an ISA that pays as much as a current account then go for it, otherwise ......................

eskbanker

chanders wrote: »

With the slashes in bank interest rates to ISA accounts (e.g. 0.25%) would you recommend transferring ISA savings into current accounts that offer slightly better interest rates?

Although ISA is tax free the interest rate is dismal, any advice much appreciated

This would have been a good idea several years ago when current accounts started paying better rates than cash ISAs, even allowing for tax.

This became an even better idea earlier this year when the personal saving allowance was introduced, negating the tax effect for most.

This has become a complete no-brainer now after the latest round of rate cuts....!

* assuming we're not talking massive multi-year cash ISA pots in high five figures or above

bxboards

eskbanker wrote: »

This became an even better idea earlier this year when the personal saving allowance was introduced, negating the tax effect for most.

You only need 2 Santander 123 accounts maxed out to exceed the personal saving allowance, so I think ISAs still have a place. Although I would be looking into long term fixes, not instant access at 0.25%....

enthusiasticsaver

Now there is the personal savings allowance there is little point in cash isas. My personal preference for savings now are stocks and shares isas, high interest current accounts and fixed term deposits if there are any decent ones available. The only cash Isa I have is a fixed term one with Coventry BS. What amount are you talking about?

jimjames

bxboards wrote: »

You only need 2 Santander 123 accounts maxed out to exceed the personal saving allowance, so I think ISAs still have a place. Although I would be looking into long term fixes, not instant access at 0.25%....

ISAs absolutely have a place. Just not cash ISAs. Long term money is likely to be better in S&S ISAs, again not cash. When you can get so much in current accounts that pay better, you;'d need a fortune to need beyond that.

For £6k I agree it's a no brainer to use current accounts.

eskbanker

bxboards wrote: »

You only need 2 Santander 123 accounts maxed out to exceed the personal saving allowance

Indeed, hence my qualifier of 'for most' (most people having somewhat less than 'only' £40K in savings)!

chanders

I currently have an instant Isa - halifax one which is 0.6% so it's really bad.. I don't think anywhere is any better. I also put a bit of money in stock and shares isa too but bull is in the cash one

chanders

I am trying to save for a property so I don't want to fix it per say... and with some of the first time buyer isa it's only a small amount you can put in there and you can't open another isa along side it. I have around 20k and a small amount in SandShares Isa but I want something more stable rather than putting all in S'S which is riskier... hope that makes sense... just to clarify if u put in a current acc u wouldn't be affected by tax?