ISA or current account?

WaxiesDargle

They say that there is no stupid question so here goes...

I belong to two banks, the Halifax and TSB. I have just opened the TSB current account which offers 3% on amounts of up to £1500

My Halifax instant access ISA gives me 0.05% but is obviously tax free being an ISA

Would it be worth my while transfering £1500 from my Halifax ISA to TSB current account and pay tax on the savings? I pay 20% tax

My maths is plainly rubbish so any help is appreciated. Thanks

Neil_Jones

You can do better than 0.05% already in an ISA.
https://www.moneysavingexpert.com/savings/best-cash-isa

Top easy access ISA 1.07% with the Post Office. Why settle for 0.05%?

badger09

WaxiesDargle wrote: »

They say that there is no stupid question so here goes...

I belong to two banks, the Halifax and TSB. I have just opened the TSB current account which offers 3% on amounts of up to £1500

My Halifax instant access ISA gives me 0.05% but is obviously tax free being an ISA

Would it be worth my while transfering £1500 from my Halifax ISA to TSB current account and pay tax on the savings? I pay 20% tax

My maths is plainly rubbish so any help is appreciated. Thanks

3% is higher than 0.05%;)

3% less 20% tax = 2.4%. Still higher than 0.05%:)

If £1500 is your total savings, then you won't pay tax on your savings interest:T

18cc

If you want an ordinary savings account that pays more interest than your Halifax one then open a Tesco Internet saver it pays 1.2% which is a lot higher than 0.05%

jimjames

18cc wrote: »

If you want an ordinary savings account that pays more interest than your Halifax one then open a Tesco Internet saver it pays 1.2% which is a lot higher than 0.05%

Why would you bother when you can get 3% in an account you already have?

If you are a 20% taxpayer then you can get £1000 interest tax free anyway so a cash ISA is essentially pointless for most people

WaxiesDargle

Thanks all

datlex

jimjames wrote: »

Why would you bother when you can get 3% in an account you already have?

If you are a 20% taxpayer then you can get £1000 interest tax free anyway so a cash ISA is essentially pointless for most people

I was thinking that.

OP what is the requirements regarding funding on your TSB account? For me it is £500 a month. I have an overflow savings account alongside my TSB account for when the money in there goes over £1500 for a day or two. e.g. when money is funding the account. I also move out interest to another account. You only get interest on first £1500. You might actually want to have both the current account and the ISA (depending on type).
TSB did have a regular saver at 2% too.

Dazed_and_confused

If you are a 20% taxpayer then you can get £1000 interest tax free anyway so a cash ISA is essentially pointless for most people

There are some* 20% taxpayers who will have an effective 5% tax rate on savings which are taxed at the personal savings allowance rate of 0% but even then a decent paying current account will beat a lot of ISA's

* Elderly pensioners getting Married couples Allowance could lose some of their Married Couples Allowance if they get savings interest within the £1000 personal savings "allowance"

binaryuniverse

If you have £2500 available then it's worth opening a Nationwide FlexDirect to get 5% for one year.

Katiehound

binaryuniverse wrote: »

If you have £2500 available then it's worth opening a Nationwide FlexDirect to get 5% for one year.

and if you have a current a/c that you can switch you could be recommended by a friend and each get £100. T&Cs apply naturally enough!
see referrers board for people to help you