Top Cash ISAs Discussion Area

ejv

INSPIRED wrote: »

why we should take out another ISA when the money could be earning 3% in a Santander 123 account.

ISA is and eternal tax-free saving, and if you don't avail each year, its gone forever.This is highly beneficial for taxpayers, especially 40%.
(The same applies to offset mortgage,where a 3.6% mortgage for a high tax payer is same as earning 6% gross interest on the offsetted amount)
If you are going to remain a non-tax payer, then I think paying off mortgage would be better.

Pound

I just wanted to confirm something.

I have an ISA which has matured but I haven't paid anything in this tax year. I'm thinking of applying for the Post Office ISA which is fixed for 1 year. I have a few K in my current account that I'd like to put into savings.

Am I OK to deposit that money into my existing ISA (thus restricting future ISA deposits with other banks) and then transfer the full amount of the ISA to Post Office?

innovate

As long as you are allowed deposits into your existing ISA, you can pay up to £5,760 into it and transfer the lot to somewhere that allows transfers in. If you don't deposit the full £5,760 and transfer to a fixed term ISA, you have effectively lost the remainder of your ISA allowance.

Unless you are a higher rate tax payer, an alternative could be to put your savings into one of the interest paying current accounts and put the money into an ISA just before the end of the tax year. Transfer only the existing ISA funds in the meantime.

INSPIRED

takethemon wrote: »

if you have spare savings,i would pay off some of your mortgage.
its a nice feeling seeing that debt figure falling.
unless you have extreme amounts of money,the difference in interest you will get over a year after tax with santander versus an isa will be minimal.
as you are a non taxpayer santander looks ok,and your joint savings,except his isa,should be in your name to maximise tax benefits but,as a taxpayer, i am holding onto my isa's hoping that interest rates will rise sooner rather than later.

Many thanks, takethemon.

I always worry that I am missing some important factor when deciding between ISA's and mortgage overpayment. We have had ISAs for years but that was when the interest rates where much higher than our mortgage rate.

In the past few years, rather than reinvesting ISA savings, I have put it towards the mortgage. As you say, it is a "nice feeling" to see the mortgage reduce!

On the other hand, I do worry about not making use of cash ISA's

INSPIRED

Thank you, ejv

ejv wrote: »

If you are going to remain a non-tax payer, then I think paying off mortgage would be better.

.......even though OH could be paying higher rate tax in the next 2 years?

Although I hate losing the tax free benefits of ISAs, I had convinced myself that, with rates as they are at present, reducing the mortgage is sensible.

takethemon

INSPIRED wrote: »

Many thanks, takethemon.

I always worry that I am missing some important factor when deciding between ISA's and mortgage overpayment. We have had ISAs for years but that was when the interest rates where much higher than our mortgage rate.

In the past few years, rather than reinvesting ISA savings, I have put it towards the mortgage. As you say, it is a "nice feeling" to see the mortgage reduce!

On the other hand, I do worry about not making use of cash ISA's

just think of all that interest you will not be paying! and looking at it in a particular way that is tax free too.
i would be falling over myself to pay off a mortgage in these austere times.
mortgage rates are usually much higher than savings rates.

typistretired

Savings Champion have emailed the following:-

On Friday 4th October, Aldermore are making changes to some of their fixed rates and unless other providers make changes before this, the 2 Year Fixed Rate ISA (2.15%), 3 Year Fixed Rate Bond (2.60%) and the 4 Year Fixed Rate Bond (2.70%) will be making an appearance on the best buy tables.

adindas

October 31 is approaching, where the interest start to drop. Where will you put your NW cash ISA ?

I have Leeds Building Society which has 2.55% but I juts called them and they confirmed I will not allowed to transfer the old ISA ?
Top up is only for new ISA money >

Is there any other ISA with a decent interest left ?

Thanks

DragonQ

For most people the 2% rate that the Nationwide Flexclusive ISA Issue 1 drops to will be the highest available anyway. The real problem comes on 1st January when the rate might drop to 0.5%.

zoebel

At the time of writing the best rate on an instant access ISA is around 2% but the best rate on a five year fixed rate ISA is just over 3%, but with a withdrawal penalty of 180 days loss of interest. However there is no limit to the number of five year fixed rate ISAs you can open, subject to the total annual subscription. Am I being naive then to suggestion that you can gain an extra percentage whilst
still effectively having "instant access" by just having several fixed rate ISA's with small amounts in them?