ISA v Fixed rate account

Cow_girl

Hello
Am I right in thinking I would be better off taking my money out of the ISA I have and putting it into a fixed rate account with a higher interest rate?
I have £30,000 + in my ISA. The best rate I can find is 1.7%.
What if any would be the draw backs?
Thanks.
(This is my first post ever) ((Forum Virgin!!))

polymaff

Cow_girl wrote: »

What if any would be the draw backs?

That you could never reverse the decision. Which is barely relevant nowadays.

eskbanker

polymaff wrote: »

That you could never reverse the decision. Which is barely relevant nowadays.

'Never' is a bit of an exaggeration though - it's perfectly feasible to put £30K back into cash ISAs if desired, but only at up to £20K per tax year!

Paul_DNAP

Cow_girl wrote: »

Hello
Am I right in thinking I would be better off taking my money out of the ISA I have and putting it into a fixed rate account with a higher interest rate?
I have £30,000 + in my ISA. The best rate I can find is 1.7%.
What if any would be the draw backs?
Thanks.
(This is my first post ever) ((Forum Virgin!!))

I suppose the sums will depend on your overall non-ISA interest earnings and the personal savings allowance - that is to say - would this interest attract income tax is it was outside the ISA?


If not, then it's just a case of comparing the headline APR rates, if it will then you'll have to compare the non-ISA return with the income tax taken off .


But most providers seem to have the same rates for fixed term cash savings accounts and fixed term cash ISA anyway.

polymaff

polymaff wrote: »

That you could never reverse the decision. Which is barely relevant nowadays.

eskbanker wrote: »

'Never' is a bit of an exaggeration though - it's perfectly feasible to put £30K back into cash ISAs if desired, but only at up to £20K per tax year!

The OP's decision would be to cash in existing ISAs. Why write such nonsense?

eskbanker

polymaff wrote: »

The OP's decision would be to cash in existing ISAs. Why write such nonsense?

Not sure there's any need for the attitude - OP is asking about "taking my money out of the ISA I have" and I'm just highlighting the fact that doing so isn't irreversible in the sense that money can be paid back in (to the same ISA if kept open, or one or more new ones if not), subject to annual contribution limits.

polymaff

Paul_DNAP wrote: »

But most providers seem to have the same rates for fixed term cash savings accounts and fixed term cash ISA anyway.

Less and less, e.g. Paragon Bank 3yr ISA rate 79% of non-ISA rate.

The days of ridiculously high rates for ISAs are gone and the ~80% (surprise, surprise!) ratio is taking over.

ISAs are the new Norwegian Blue

Terry_Towelling

polymaff wrote: »

The OP's decision would be to cash in existing ISAs. Why write such nonsense?

Sorry, Polymaff, I think Eskbanker was saying that it is perfectly possible to put £30K back into an ISA after withdrawing it but you would be restricted by current ISA deposit allowances and it may take a while. So, whilst you may not be able to reverse the decision to withdraw funds, you can reverse the process later on.

polymaff

eskbanker wrote: »

Not sure there's any need for the attitude - OP is asking about "taking my money out of the ISA I have" and I'm just highlighting the fact that doing so isn't irreversible in the sense that money can be paid back in (to the same ISA if kept open, or one or more new ones if not), subject to annual contribution limits.

There's no way to reverse the ISA withdrawal the OP is asking about.

Make your, incorrect, point if you must, but without denigrating my 100% correct statement.

polymaff

Terry_Towelling wrote: »

Sorry, Polymaff, I think Eskbanker was saying that it is perfectly possible to put £30K back into an ISA after withdrawing it but you would be restricted by current ISA deposit allowances and it may take a while. So, whilst you may not be able to reverse the decision to withdraw funds, you can reverse the process later on.

You know that, I know that - but what does this nonsense add to the thread - and how does it serve the OP?

Other than to reveal a perverse attitude and a misunderstanding of the word "reverse".

There's plenty of foolishness on MSE. I just object when it is made on the back of a 100% correct statement of my own.

eskbanker

I accepted all along that a withdrawal of £30K from an ISA can't be reversed in one go, but was just highlighting that to say it could never be reversed is an exaggeration. If you're suggesting that the only valid meaning of 'reverse' is that it must be instantaneous, then I guess we'll just need to agree to disagree....

So, if OP is still reading, I repeat my clarification: if you withdraw £30K from your ISA, you can pay it back in again at any stage, subject to no more than £20K being in any given tax year.