Top Cash ISAs Discussion Area

badger09

wrenlegs wrote: »

This is probably a stupid Q but one that has just dawned on me. Can my husband and I have separate ISAs? I.e. does my husband have an ISA allowance and do I also have one? We had one ISA last year and its only just dawned on me that we could have one each in a tax year

YUP

ISA = Individual Savings Account so you can have one each :T

DAE

Hi all, first post. Firstly, excuse my poor mathematics ability. ISAs are confusing me.

Basically, I've got 5.6K sitting in an RBS ISA (ISA PLUS - no longer available to public). The rate has been competitive for a few years and I've paid in reasonably regularly (on average about £200 a month, sometimes more, sometimes less).

For the coming year the rate will drop to 2.79%, which isn't terrible, but it's the first time its dropped below 3% and there's better out there.

The way I see it I've got 3 options.

(1) Transfer the money to a new ISA at a better rate. Though this would be silly as in one swoop I've used up my allowance for the year and can't save any more tax free. So let's rule that out.

It's the next two I can't decide between, and I admit I might be having a bit of a maths fail.

(2) Leave the money in there and set up a separate ISA (e.g. the 3.3% Santander best buy), which I start again with, putting a few hundred pounds in a month. Yes, I'll be getting 3.3% but only on a small amount, meanwhile my 5.6k sits in RBS and picks up 2.79%.

(3) Just continue adding the money I would save elsewhere to the RBS ISA and push the balance up, and benefit from getting 2.79% interest on a large sum (let's say I bump it up to £10,000 in the next year).

Maybe I'm being stupid, but the last option seems best to me as although it's 2.79%, it's going to be from a larger sum?

I should also mention that I like the idea of keeping it with RBS as I have all my accounts with them and it makes transfers a piece of cake (e.g. I can do it on my phone through an app), and it makes it easier for me to keep track of my entire financial situation (2 current accounts, 1 credit card and an ISA).

Any advice on what I should be doing? I've been putting off transferring any money so I'm not locked into a decision but I need to decide soon.

Edit: ALERT! NEWBIE. Haha, thanks for that.

Consumerist

DAE wrote: »

The way I see it I've got 3 options.
(1) Transfer the money to a new ISA at a better rate. Though this would be silly as in one swoop I've used up my allowance for the year and can't save any more tax free. So let's rule that out..

Hi DAE and welcome to the forum.

Transferring an existing ISA from a previous year does NOT count towards the current year's ISA allowance. Make sure you get a transfer form from the new provider who will manage the transfer - do not withdraw from last year's ISA to move it yourself or you will lose the tax-free status on it.

You can transfer last year's ISA to a new provider, or your current provider, if they allow it, and then either (1) add to it from this year's allowance (£5,640) or (2) open a new ISA with any provider you choose for this year's allowance.

Edit
The Santander ISA allows transfers-in so you could get the 3.3% on both last year's ISA and any new money added during the current year.

flergalwit

Consumerist is right that transfers don't count towards the £5640 limit. As consumerist also says, you should fill in a transfer form rather than withdraw the money yourself.

Regarding the options you mention, option (2) is always better than option (3). I think your intuition is that putting all the money together will get a higher interest than spreading it over different accounts (if the interest rates are all the same) but this is incorrect. Putting a part in a better interest rate account is always better, as far as the overall return goes.

But better yet is to do as consumerist says. Transfer the old isa to a higher rate one that accepts transfers (e.g. Santander 3.3%). Then either add the new year allowance to that, or pick a different ISA for the new year money. (Some of the highest rate ISAs don't allow transfers in, so you could probably get a higher rate on the 2012-13 money than the old money, if you wish.)

Johnyboy1

Hi.
Can anyone shed some light on a Natwest decision. After holding an Isa with Natwest for some time and reasonably happy with its interest rate. Nat west have decided to lower its interest rate for existing clients. If your a new client you can transfer in previous accounts, why oh why don't they allow their own customers to transfer to this better rate?

Sorry Natwest your about to loose 3 existing customers who have nearly 100k between them.

Sorry to have a rant but felt it needed saying.
Disgruntled newbie.

flergalwit

Johnyboy1 wrote: »

Hi.
Can anyone shed some light on a Natwest decision. After holding an Isa with Natwest for some time and reasonably happy with its interest rate. Nat west have decided to lower its interest rate for existing clients. If your a new client you can transfer in previous accounts, why oh why don't they allow their own customers to transfer to this better rate?

I think they lower the rate because they assume (rightly in most cases - including mine till recently) that people simply won't notice and even if they do, they won't be bothered to do anything about it.

purplestar133

Johnyboy1 wrote: »

Hi.
Can anyone shed some light on a Natwest decision. After holding an Isa with Natwest for some time and reasonably happy with its interest rate. Nat west have decided to lower its interest rate for existing clients. If your a new client you can transfer in previous accounts, why oh why don't they allow their own customers to transfer to this better rate?

Sorry Natwest your about to loose 3 existing customers who have nearly 100k between them.

Sorry to have a rant but felt it needed saying.
Disgruntled newbie.

flergalwit wrote: »

I think they lower the rate because they assume (rightly in most cases - including mine till recently) that people simply won't notice and even if they do, they won't be bothered to do anything about it.

...and banks don't reward loyalty. They want new money from new customers and they will lower rates for existing customers hoping they won't notice or won't be bothered to transfer to avoid hassle.

Consumerist

purplestar133 wrote: »

...and banks don't reward loyalty. They want new money from new customers and they will lower rates for existing customers hoping they won't notice or won't be bothered to transfer to avoid hassle.

Sadly, this is widely true.

For the vigilant, however, this provides better rates than would otherwise be the case.

p00hsticks

purplestar133 wrote: »

...and banks don't reward loyalty. They want new money from new customers and they will lower rates for existing customers hoping they won't notice or won't be bothered to transfer to avoid hassle.

I'm also rather miffed about the drop in Nat West rates, and am looking to move out, but I do think it's a bit unfair to say that they don't reward loyalty.

They have been consistently paying 0.75% higher interest to those who opened their e-ISA before May 2009 than to newer customers, and from what I can see, if you ignore the introductory 12 month 1% bonus rate, the underlying rate on the ISA on offer to new customers is still lower than the reduced rate that is being offered to these existing customers after 14th May.

To be honest, given that most banks drop rates on a regular basis after the first twelve months, I've been amazed that they've maintained the same (very competitive) rate at the same level for as long as they have - around two and a half years now. Given that it's a variable rate instant access account that allows transfers in and money to be added after opening, I'm struggling to find anything comparable to move to, even given the reduction in interest rates.

adindas

I want to transfer my ISA
I understand that Santander is currently providing Direct ISA, a Flexible cash ISA which allow transfer in from previous year ISA subscription paying 3.30%.


I am aware that the Natwest e-ISA is currently paying 3.5% for the balance of 30.000+ but the news is that it will be cut by 0.25% from 14th May. This will make Santander is on the Top of the league in term of interest rate.


I am considering transferring my ISA to Santander. I am interested in knowing whether there is a sismilar product which provides a better interest rate than Santander that I have missed ?
Thank you for your time.