current acc savings or ISA savings

bxboards

eskbanker wrote: »

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

There seem to be loads of people here maxing out ALL the high interest current accounts, and then filling the regular savers too.

I do not disagree it's a good idea to fill the current accounts first, but I think anyone on a 50% tax rate with only a 500 pcm personal allowance needs to consider ISAs; I can't comment if most people are in that position and I have no idea about the OPs circumstances either.

My fear is that obviously these high interest current accounts are a loss leader than are likely to end, I do not see how it's feasible for them to continually pay 10 or 20 times the base rate in some cases. I suspect once one drops they will all drop them like dominoes then a 2% fix may not look so bad....

Vortigern

chanders wrote: »

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?

Tax is not deducted from current accounts or savings accounts. If you happen to earn more than £1000 in interest you'll have to tell HMRC and they may ask for some tax.

If I were you I would have a HTB ISA and spread the rest of my cash across several current accounts. Nationwide and TSB pay 5% interest, Lloyds pay 4%, several others pay 3%. All will beat cash ISAs. None will lock you in.

eskbanker

bxboards wrote: »

There seem to be loads of people here maxing out ALL the high interest current accounts, and then filling the regular savers too.

I do not disagree it's a good idea to fill the current accounts first, but I think anyone on a 50% tax rate with only a 500 pcm personal allowance needs to consider ISAs; I can't comment if most people are in that position and I have no idea about the OPs circumstances either.

Posters on here aren't representative of the population as a whole, who, depending on which survey you believe, have somewhere between £2K and £6K in savings on average. According to HMRC figures, 95% of taxpayers won't pay tax on savings interest after the introduction of PSA.

I think we're all agreeing about which accounts to use by preference but the question is really about whether you'd ever need to get as far as using cash ISAs, i.e. once you have a savings pot of, say, £50K in cash, it's likely to be time to be looking at diversifying beyond cash rather than using cash ISAs....

splatt30

We have money across several current accounts and regular savers. I only get the £500 personal savings allowance but I will still be better off earning the interest and paying tax on anything over £500 than putting it in an ISA

katejo

bxboards wrote: »

There seem to be loads of people here maxing out ALL the high interest current accounts, and then filling the regular savers too.

I do not disagree it's a good idea to fill the current accounts first, but I think anyone on a 50% tax rate with only a 500 pcm personal allowance needs to consider ISAs; I can't comment if most people are in that position and I have no idea about the OPs circumstances either.

My fear is that obviously these high interest current accounts are a loss leader than are likely to end, I do not see how it's feasible for them to continually pay 10 or 20 times the base rate in some cases. I suspect once one drops they will all drop them like dominoes then a 2% fix may not look so bad....

I also suspect that high interest current accounts will come to an end. I only have one because of the requirements by some to transfer DD's and to transfer certain amounts of money each month. Yes I know you can transfer money in and then out again but it can get a bit complicated if you have multiple transfers.

Eco_Miser

katejo wrote: »

I only have one because of the requirements by some to transfer DD's and to transfer certain amounts of money each month.

Apart from M&S, transfer of DDs is only required for transfer bonuses.

katejo wrote: »

Yes I know you can transfer money in and then out again but it can get a bit complicated if you have multiple transfers.

It's not really complicated. Either move the highest required figure through all the accounts, or move the required amount into each account and back again.
it can get more complicated if you try to minimise movements and amounts, and fit in with irregular payments, as I do, but it's still quite easy.

Mee

Hi Guys,

Sorry to piggyback on the poster's question.
I have a large amount in an ISA which is about to mature. I have maxed out most of the current account options (Tesco, Sant., NWide, TSB, LLoyds, BoS, Halifax) and some linked regular savers and I am really unsure what to do next.

My current provider is offering 1.4% fixed for 2 years at, 1.25% 1 year, or 1% easy access. I don't wish to go near S&S ISAs, but feel that given the size of my savings I still need the ISA protection (because I exceed PSA). I know there are some ISAs with notice which pay a slightly higher interest rate.

I could explore more linked RSs but still need to park the funds somewhere, but where?

One option which appeals is to split the funds between 1 and 2 yr fixed, and deposit an amount somewhere and drip feed it into more RSs.

Advice needed and welcomed...

bigadaj

Why are people so scared of exceeding the psa?

It's better to get 3% and get taxed at 40% than sit in a cash isa at 1% surely?

As to whether you should have more than £50k in cash then that's a slightly different issue. But many people are very risk averse and don't want stock market investments, bonds, peer to peer etc.

Holmesy999

Can a S&S ISA be used to invest in something that is almost as safe as a current account to take advantage of additional tax benefits on top? Surely there is some fund available that can be considered a safe bet and pays better than a cash isa??

chanders

Although stock and shares Hargreaves landsdown has some managed portfolios that you could consider