Drip feed from ISA

[Deleted User]

Advice sought please. Should I start drip feeding current accounts which earn between 3%-5% from an ISA earning 1.8%? I would lose 6 months interest from the money withdrawn from the ISA and would be unable to replace it in this current financial year. The ISA matures in March when I will need to find another home for the balance. Thank you.

IanSt

The answer will depend on the mix of savings you currently have, your needs for them, and what savings you'll be making going forward.

If it were me then I would be inclined to move my money across to better paying current accounts and regular accounts - and then in a years time consider moving the money back to an ISA if they started paying better rates. But you may already be considering in fully paying into next year's ISA so that might not be an option for you.

[Deleted User]

Thanks for taking an interest. I think I'm just going to leave things as they are. I need about £5000 to tide me over until March, but have 4 Tesco accounts with £12000 (4 x £3000) so I'll probably skim the money off them. My penalty for moving the £5000 would be £45 in interest, I'll lose roughly that amount for not having the Tesco accounts full so its neither here nor there. Don't think the difference is worth the hassle. The big decision will be what to do with the maturing ISA, rates are so poor currently. Fingers crossed something will turn up.

binaryuniverse

A Nationwide FlexDirect at 5% for 12 months up to £2500 would be the obvious choice, if you don't have that already. Then from this list, moving downwards:

First Direct Regular Saver at 5% (£300pm)
Nationwide Flexclusive RS at 5% (250pm)
M&S RS at 5% (£250pm)
HSBC RS at 5% (£250pm)
TSB offering 3% up to £1500.
BoS Vantage 2% up to £5000.
Santander 1.5% up to £20000.

Of course, you would have to open a new bank account for all of these, and there are plenty of hoops to jump through. But, in my experience, only First Direct and HSBC are difficult to get accepted (and HSBC need a high minimum pay in per month)

[Deleted User]

Thanks. I'm afraid I've used up all those options with the exception of HSBC who wouldn't accept me. I would add for others reading the COOP who along with the switching fee give you £4 a month for having £800 sitting there. I think that's about 6%. My Nationwide Flex Direct which I currently use as my main account ends in March when the interest rate drops so that will be another account I'll no longer have to source.

binaryuniverse

You don't even need to leave the £800 in the account, to get the £4. Just pay in, and straight out. So that £800 could be elsewhere, even if its at 1%, it's something.

Other options:
Leeds BS RS 2.3% (£250pm)
TSB 2% RS (250pm)

I also forgot the Santander RS, 5% (£200pm). Though I'm guessing you already have that also.

datlex

Deleted_User wrote: »

Advice sought please. Should I start drip feeding current accounts which earn between 3%-5% from an ISA earning 1.8%? I would lose 6 months interest from the money withdrawn from the ISA and would be unable to replace it in this current financial year. The ISA matures in March when I will need to find another home for the balance. Thank you.

Ok which is higher 6 months at 3% or 6 months at 1.8%? Move the money to the current accounts and fill them to capacity. When meeting the funding requirements you can rotate a weekly amount of as little as £200.