Top Cash ISAs Discussion Area

blackswan2

Manchester BS offering a 6.5% cash ISA at the moment (although you can't apply online).

Is this the best straightforward ISA deal around ?

Baldur

blackswan2 wrote: »

Is this the best straightforward ISA deal around ?

Depends how you define 'straightforward' - the rate is fixed until 31 October 2009 and withdrawals & closures are subject to 35 days loss of interest until that date.

I am in the process of transferring one of my Cash ISAs into it.

blackswan2

Thanks!
I note it says this on the application form "I apply to subscribe to this cash ISA for the tax year 2008/2009 and each subsequent year until further notice"

Does that mean if you don't tell them otherwise byApril 2009 then you are restricted to this cash ISA for nexy tax year as well???

Baldur

No, that just lapses if not utilised.

Jake'sGran

blackswan2 wrote: »

Thanks!
I note it says this on the application form "I apply to subscribe to this cash ISA for the tax year 2008/2009 and each subsequent year until further notice"

Does that mean if you don't tell them otherwise byApril 2009 then you are restricted to this cash ISA for nexy tax year as well???

A few different organisatons are doing this sort of thing these days. Usually you will get notice that it is due to mature and then you should look around if the rate can be bettered. I just slipped up with Saga and car insurance. Because I was late deciding which was the best deal they debited my credit card. It was soon put right though. Yesterday I received a new bond certificate for a £500 bond with the Yorkshire BS but the rate is poor. It sits in a poor rate account until end of Oct but they still issue the new bond.

Baldur

Jake'sGran wrote: »

A few different organisatons are doing this sort of thing these days.

Your examples are totally different, mere marketing ploys, whereas the wording of the Cash ISA forms are suggested by the HMRC - see Chapter 4.11.

lucemate

I'm 17 and i already have an ISA with Egg which i set up last year and i think is about 1000 short of the max limit. I now want to save 5000 and i'm thinking that because its now the new tax year and i can put in 3600 i should do that and then put the rest in a savings account (this could mean that next tax year in April i can transfer the original amount with the money in the savings account to make the full amount in another cash ISA) does that sound sensible, or has anyone got any advice as to what else i could do with it? I want it to be safe because i'm saving it all for Uni!

JimmyTheWig

lucemate wrote: »

I'm 17 and i already have an ISA with Egg which i set up last year and i think is about 1000 short of the max limit. I now want to save 5000 and i'm thinking that because its now the new tax year and i can put in 3600 i should do that and then put the rest in a savings account (this could mean that next tax year in April i can transfer the original amount with the money in the savings account to make the full amount in another cash ISA) does that sound sensible, or has anyone got any advice as to what else i could do with it? I want it to be safe because i'm saving it all for Uni!

Firstly, to be safe - don't put more than £50,000 in any one institution. It doesn't sound like you have that much, so as long as you are using cash ISAs and savings accounts (as opposed to stocks and shares investments) then you're fine.

Secondly, yes it makes total sense to put £3600 of your £5000 into an ISA now. This can go into the same ISA as you already have or you can open a new one with a new bank. I'd say go for whichever pays the highest interest. And yes, put the rest in a high interest savings account.

Thirdly, I don't quite understand your point about what to do next year. Why not just put the remaining £1400 into an ISA next year? Why would you need to combine it with your Egg ISA money from last year (if that's what you are suggesting)?

Fourthly, I might now contradict everything I have said in paragraphs 2 and 3!
Are you currently paying income tax? I'm guessing that at 17 and planning to go to Uni you're studying A-levels and probably not earning that much.
Are you likely to be paying income tax before you need the money? Again, I'm guessing probably not if it is for Uni.

Cash ISAs have two benefits over high interest savings accounts.
1. The interest you receive from them is tax free.
2. The interest you receive from them _remains_ tax free for as long as the money is in the ISA.
So for someone paying income tax, they should put their savings into an ISA.
For someone not paying income tax, but planning to pay income tax soon, they should also put their savings into an ISA because if they don't they lose out on their annual entitlement and will end up paying tax on their interest.

But for someone who is not paying income tax and won't hold the savings when they do start to pay income tax, neither of the two benefits above are valid.
So I'd be tempted to say go for the highest interest rate you can get, be it an ISA or a savings account. If you know you won't need the money for a year then you can usually get a better rate with a one year fixed deal.

thedon

I'm in the process of moving my Cash ISA to RBS (based on last weeks MSE articles) and am a bit concerned about the turbulence affecting RBS today.

That said, I notice it's ISA rates are still unchanged - and still higher than the latest "best buy" providers now shown in the MSE Cash ISA article.

Is this likely to change drastically in the next few hours / days? - I already have money moving between Kaupthing EDGE and ING Direct, and would rather put my ISA somewhere safe rather than chase an extra couple of quid in higher (unsustainable?) interest rates?.

Baldur

thedon wrote: »

That said, I notice it's ISA rates are still unchanged - and still higher than the latest "best buy" providers now shown in the MSE Cash ISA article.

Is this likely to change drastically in the next few hours / days? - I already have money moving between Kaupthing EDGE and ING Direct, and would rather put my ISA somewhere safe rather than chase an extra couple of quid in higher (unsustainable?) interest rates?.

The 2% bonus is fixed for the specified term on transferred Cash ISA funds but the underlying interest rate is variable, so could well change in response to the 0.5% BOE base rate cut which was made last week.