Best Cash ISA?

pinklady21

Looking for a decent home for ISA cash for 2018/19 tax year.
Already have a Nationwide Loyalty ISA earning 1.4%. Have transferred in previous year's Cash ISA's and now just on the £85k savings limit.
Cash likely to be needed this year for a house deposit, so don't want to tie in to a fixed period.
I have an N Sand I ISA, but the rate is lower at 1%.
Not paid anything into a cash ISA yet this tax year.
I have about £500 spare cash a month that I need to stash somewhere until the ideal house comes up.
Higher rate tax payer, and already maxing out on regular savers.

The dilemma is should I just keep topping up the Nationwide ISA even though it is now over the £85k limit, or open another one with as high a rate as I can find (looking at the Best Buys, probably Shawcross Bank at 1.25% and use that for this year's contributions instead?
Thank you!

Paul_DNAP

You're going to struggle to get a better rate for an instant (ish) access cash ISA.

The £85k isn't a savings limit, it's the compensation ceiling if your bank disappears and takes all your money with it. So what's the odds on the Nationwide disappearing without a trace between now and when you'll need your house deposit? I'd say very slim indeed.

And if it did come to a situation where all the banks collapse and we're all calming on the FSCS to find our money, then I think we will be in a desperate state all round and you'll struggle to find anyone willing to lend you a mortgage to buy your house anyway. We'd be lucky to find bread to eat.

I'd put it in the Nationwide, but if you are nervy then there isn't a massive difference between 1.25% and 1.4% anyway.

pinklady21

Thanks - yes of course, I meant the savings compensation limit!
I just wondered if anyone had any better ideas that had not occurred to me on this one.

jimjames

If it's cash for house deposit then ISA is irrelevant just go for the best rate. Not sure of others but Tesco is 1.3% for savings account

pinklady21

Yup - but we have been looking for a new home for 2 years already, and finding it really difficult to find the right place! No idea how long we might be in limbo, and would like the cash to remain liquid in the meantime, just in case the right thing comes up and we have to move on it quickly.
I am already probably pushing the £500 higher rate taxpayer savings allowance with other taxable savings, so using ISA to try and minimise what is due.
I could dump any excess cash into my 1.44% Birmingham Midshires, but at the cost of it being taxable. Heh ho.

Zorillo

I wouldn't be too concerned that Nationwide was likely to go bust in the immediate future, but then I might feel differently if I had £85k with them.

Dazed_and_confused

I am already probably pushing the £500 higher rate taxpayer savings allowance with other taxable savings, so using ISA to try and minimise what is due.
I could dump any excess cash into my 1.44% Birmingham Midshires, but at the cost of it being taxable. Heh ho.

Slightly off topic but the £500 isn't really an "allowance" so for example if you are having to pay the High Income Child Benefit Charge or have income in excess of £100k the £500 could result in extra tax being payable even though the interest itself may be due to be taxed at 0% (the Personal Savings Allowance tax rate).

colsten

Ignore the few pennies of interest you could squeeze out and try your luck with Premium Bonds? Any "winnings" would be tax free.

pinklady21

Thanks - I already have Premium Bonds maxed out at £50k, so does OH. It is quite a large house deposit..... just wish I could find something to spend it on!

tenchy

Nationwide Loyalty ISA seems to be the best. Earlier, I was about to transfer my Virgin Money ISA to it but I noticed it pays interest annually, so I cancelled the application to look further at it. Would annual interest put anyone off? I don't see a problem with it ...

SallySunshine

It looks like the Shawbrook Easy Access would be your best bet, after reading your post.

I thought the rates were bad enough last year, but now lots of institutes aren't even offering any type of ISA's at all!