Question regarding 1.4% ISA or 1.5% Sant. 123 Acc

scoot65

I'm in the process of transferring my ISA from my existing provider to Leeds BS. I applied to get Leeds BS 2 yr fixed rate ISA at 1.4% (issue 81) just before the rate dropped to 1.25%.

Initially I was not going to add this year's ISA allowance, but since the notice of Santander's 123 rate top to 1.5% I thought I might stick this year's ISA allowance cash in the 1.4% ISA too.

My question…….

Would the £15240 be better in the 1.4% ISA rather than Sant 123 account at 1.5% ? ….paying the £5 monthly fee and not receiving any cash back

I already have all the 'high interest' current accounts maxed out so can't stuff it in them. I also don't have DD's to get cash back on the Santander 123 account

Many thanks
s65

masonic

A £60 per year fee is definitely more than 0.1% interest on £15,240.

scoot65

Thanks for the reply, yes quite right!

I forgot to mention that I have £20k in the Sant 123 account… if this makes any difference??

Eco_Miser

If you keep the Santander 123 you will still pay the fees.
Unless you receive over £1000 total interest, you won't pay tax on the Santander interest, so 1.5% is better than 1.4%.

You could have been earning much more by spreading the £20k around the 6%,5%, 4% and fee-free 3% accounts.
You still can, but maybe not for much longer.

masonic

scoot65 wrote: »

I forgot to mention that I have £20k in the Sant 123 account… if this makes any difference??

Yes it will if you can't find an alternative home for the other ~£5k. As Eco Miser points out, you'll continue paying the fee unless you close the 123 account.

Eco_Miser wrote: »

You could have been earning much more by spreading the £20k around the 6%,5%, 4% and fee-free 3% accounts.
You still can, but maybe not for much longer.

It seems the OP has this covered by the following comment:

scoot65 wrote: »

I already have all the 'high interest' current accounts maxed out so can't stuff it in them.

Hopefully there are one or two on that list he has missed.