Top Cash ISAs Discussion Area

townman

Hi,
Please excuse my ignorance, last April my wife and I both opened cash ISA's with £3000 in each with Barclays tax haven at a tax free rate of 6.31%.
As it is coming up towards April again,can anyone advise me what I do now,
leave it alone?, transfer it?, I do not have a clue.We are hoping to put another £3600 in each this April somewhere.
Thanks in advance for any help.

whu

townman wrote: »

Hi,
Please excuse my ignorance, last April my wife and I both opened cash ISA's with £3000 in each with Barclays tax haven at a tax free rate of 6.31%.
As it is coming up towards April again,can anyone advise me what I do now,
leave it alone?, transfer it?, I do not have a clue.We are hoping to put another £3600 in each this April somewhere.
Thanks in advance for any help.

If it is a fixed period ISA for a year wait until it matures and then look on moneysupermarket.com for the best rates going and transfer it to that ISA and then add the new allowance of £3600 to that aswell - if it is a variable ISA check out the best rates now and again transfer it to the best one and add the new money to it

stphnstevey

What sort of equivilent interest rate would you get from the 7% RS ISA's Martin lists - must be about 5% as your drip feeding the money in.

Just trying to compare it to a normal ISA rate

stphnstevey

NikkyWikky wrote: »

Hi all,

I'm trying to do the maths for this. For the coming tax I need to invest 3600. Now is it worth investing it as a lump sum into my existing isa which is earnign roughly 3% or drip feed it into the 7% regular cash ISA. Heres my calculation:

Drip feed into 7% ISA - £135.09 interest (using Martins Regular saver calculator http://www.moneysavingexpert.com/savings/best-regular-savings-accounts. invest £300 per month)

Invest 3600 into existing ISA @ 3% - £108 (assuming interest rate stays the same)

So does this mean it better to save in the regular saver as you earn more interest and you also you dont need £3600 available to you at the start of the tax year.


Does this sound right? Correct me if i'm wrong.

Also is the 7% fixed?

Nik

It would be different if you were drip feeding it from another account though as you would have to include that interest. That would depend on what account you were drip feeding from.

However as your calculation shows it's more interest simply with the reguler saver, then anymore from drip feeding is a bonus.

The RS's are both fixed - see info in rate in martin's article.

However I notice you have used 3% and not the best 3.5% ISA deal?

Sam_41

So it appears the regular saver ISAs are much better, especially when you consider the additional interest you can earn on the cash whilst it's being drip fed in to the account.

So that's next tax year sorted.

However, I have currently got about £12-13k to invest, with around £700-800 a month income after all bills, expenses etc have been deducted. I have not previously used a cash ISA (I've only recently had funds available to invest).

So, should I load the full £3.6k in to a 3.5% ISA, the balance in to a savings account (would Citibank 3.26% be best - not the highest rate but less stringent on withdrawals and min. investment) then drip this ~£9k in to a regular savings account every month. I think Halifax @ 5% would be better than Barclays @ 6% due to the allowance to invest £500 p/month rather than £250?

Actually, I've just done some calculations, looking at the 1st 12 months only:

Option 1: Invest £12k in to Citibank @ 3.26% then drip feed £250 p/month in to Barclays @ 6%:

Barclays = £99.31 interest. Citibank = £351.77 interest. Total = £451.18. Effective AER = 3.76%.

Option 2: Invest £12k in to Citibank @ 3.26% then drip feed £500 p/month in to Halifax @ 5%:

Halifax = £165.01 interest. Citibank = £306.63 interest. Total interest = £471.64. Effective AER= 3.93%.


So I was right

Just to clarify, next tax year I would be investing £300 p/month in the regular cash ISA from my income, so it won't affect my calculations above (it's a seperate investment to the £12/13 k I have now).

Any feedback on this would be great, I'm completely new to this!

EDIT - JUST NOTICED A FLAW IN MY CALCULATIONS:

It would be better to only invest in the Citibank 3.26% the funds required to be drip fed in to the regular saver a/cs. The balance should be invested in a cash ISA and/or a fixed rate.

So, I've done the calculations, and theres only about 60p in it in favour of option 2, so I'll just show my workings for that:

Invest 3.6k in cash ISA @ 3.51%: Interest = £128.41
Invest £6k in Citibank 3.26%, with £500 p/month transferred to regular saver: interest = £108.08
Regular saver - Halifax £500 p/month @ 5% = £165.01
Invest surplus funds (£2.4k) in ICICI at 3.9% = £95.29

Total interest = £496.80. Effective AER = 4.14%.

Then going forward, any income I get (minus £300 p/month invested in a regular ISA next tax year) will be paid directly in to the Citibank savings account.

stphnstevey

Martin has a calculator for drip feeding
http://www.moneysavingexpert.com/savings/best-regular-savings-accounts#calculator

davt41

Hi,

I would like to transfer my ISA as I am not getting the best rate. I do not have any penalties for doing this now, but will I loose all the interest I would have got if I transfer all my money. What will happen if I leave say £10 in the ISA I have at the moment.


Thanks

Wsb5tails

it rather depends on your providers rules but I'd guess you'll lose the interest on all but the £10 you leave with them.

Check you T&S or post the provider details here and someone will have the answer.

geet

Can someone tell me if this makes sense - i am a bit confused...

I have 6K of previous isa that i plan to put in Natwest at 4.02%. Is that the best?

The new 3600 i plan to put in First Direct 7% except someone was telling me that FD is dodgy(?). Anyway, I just used their calculator and there I see that putting 3600 at 3.25 (New Natwest) and dripping it at £300 pm to First Direct at 7% earns me almost the same interest. So, what is the advantage - that I may get some interest on the reducing lump sum that I should put in some savings account that I can withdraw regularly from? Which a/c would be good for that?

Thanks in advance.

vineweevil1

I currently have an appauling Halifax ISA with 1% Interest. I have £6600 in their and have used all of this years tax allowance.

I am also putting £250 a month into a tesco account with appx 5% int (including bonus).

So, what can I do with my £6600 to earn more interest and when. Can I transfer to another ISA within this tax year or do I have to wait for next tax year. Would I still have next years allowance regardless?

Having a nice but Dim day.....