take out new ISA now- or wait until april?

scams2udirect

if you wanted to take out an ISA now, would you do it now or wait until start of 'new year' in april? ie would you expect to get a whole load of new deals with better % rates in april, is there a general pattern of what to expect in 10 days? maybe somewhere around £10k

eskbanker

This time of year around the tax year change (both before and after) used to be characterised by better cash ISA deals being available, but to the best of my recollection it hasn't been like that for a number of years now, at least partly due to cash ISAs being less tempting than before following the introduction of the personal savings allowance in 2016.

If you have £10K, haven't used your 2018/19 ISA allowance yet but are determined to use cash ISAs then I'd get it into an ISA anyway - if something better turns up in 2019/20 then you may be able to do a transfer into the new product, or if you're not routinely using your annual £20K allowance you could even withdraw and redeposit if new leading ISAs don't accept transfers.

However, if your question is really 'what's the best return I can get on £10K?' then that's unlikely to involve a cash ISA, given the range of current accounts and regular savers that pay more interest....

Reed_Richards

eskbanker wrote: »

However, if your question is really 'what's the best return I can get on £10K?' then that's unlikely to involve a cash ISA, given the range of current accounts and regular savers that pay more interest....

More interest on £10k??? All regular saver accounts that I know of are linked to a current account and allow you to invest a few hundred pounds a month. So suppose you had the First Direct account (5%) max £300 a month, M&S (5%) max £250 a month, Nationwide (5%) max £250 a month, HSBC (5%) £250 a month. So that is £1050 a month in total and it would take you 10 months to use up the £10k. Actually it would take you 12 months because the HSBC account requires a contribution every month.

Now, you need to unscrupulously fool each of these banks into thinking it holds your main current account by using standing orders to shuffle money around so each bank thinks it is getting your salary/pension payment each month. You probably need another £1k at minimum to do this on which you're probably not getting any interest.

Then at least some of these regular saver deals are only for new customers and only last a year so you will need to find a new set of mug banks a year from now.

Meanwhile what do you do with your £8950 whilst you are waiting for your your second months round of payments? If you put it in a Flexible Cash ISA you could replace the money next March and you would still have the tax shelter of an ISA for most of your £10k. This may be of no particular value to you now but if you ever grow rich it will be.

eskbanker

You'll notice that I referred to "the range of current accounts and regular savers that pay more interest" - it does involve some effort to set it all up but even for those disinclined to chase the very best return there are also non-ISA savings accounts with better rates.

Your reference to needing to "unscrupulously fool" banks betrays your moralistic agenda on maximising return in this way, which is fine, it's not for everyone - there are plenty of other things to do with £10K so your option of a cash ISA is perfectly legitimate too, my point was just that better returns can be achieved if that's desirable to OP, as promoted by MSE at https://www.moneysavingexpert.com/savings/which-saving-account/.

Each to their own!

Frogletina

My monthly payments to regular savers is edging towards £5000 a month.

I have a flexible ISA from which I draw £5000 a month to my feeder account and from there I transfer what I need to my regular savers. As the regular savers mature, I put the maturity money back into my flexible ISA.

I used to keep the maximum money I could in current accounts, but the interest rates on most of them are now equal to my ISA.

I do not need to keep a spare £1000 from earning interest. One day a month I manually transfer £1000 between banks that need a regular monthly top up, and back to the original bank.

I may withdraw the money in my Tesco accounts before the end of the tax year to make the most of this years ISA allowance, but then after 6th April I'll put it back in my Tesco accounts until June to make the most of the 3% interest. I'll lose a very small amount of interest for a couple of days, but if the regular savers reduce, I will have enough capacity in my ISA allowance.

frogletina

Reed_Richards

If, like Frogletina, you have managed to somehow have enough regular saver accounts to pay in £5000 a month then perhaps there are economies of scale which make the time taken to set-up the 20 or so accounts necessary and make the manual transfers of money worthwhile. But this isn't normal savings, this is savings plus work. Hopefully the extra interest is worth the time spent but not everybody will have the time or inclination to be to do this. Blithely comparing a complicated scheme like this with a straight savings account is what I think is wrong, call me moralistic if you will.

Frogletina

Reed_Richards wrote: »

If, like Frogletina, you have managed to somehow have enough regular saver accounts to pay in £5000 a month then perhaps there are economies of scale which make the time taken to set-up the 20 or so accounts necessary and make the manual transfers of money worthwhile. But this isn't normal savings, this is savings plus work. Hopefully the extra interest is worth the time spent but not everybody will have the time or inclination to be to do this. Blithely comparing a complicated scheme like this with a straight savings account is what I think is wrong, call me moralistic if you will.

The manual transfers can be done in 10 minutes a month once the accounts are set up. The regular savers are all on standing orders.

I would love to have just one savings account which would give me a return equal to what I can get now, but there aren't any.

I fail to see why it's wrong to do so

frogletina

eskbanker

Reed_Richards wrote: »

Hopefully the extra interest is worth the time spent but not everybody will have the time or inclination to be to do this. Blithely comparing a complicated scheme like this with a straight savings account is what I think is wrong, call me moralistic if you will.

I don't see a blithe comparison, I see a comparison between something straightforward and simple, but with relatively low return, and something undoubtedly more complex but more rewarding (financially). It's a trade-off, one way will suit some, the other will work better for others and there are of course all sorts of shades of grey in between the ends of the spectrum.

The comment about being moralistic was nothing to do with the fact that two separate styles of saving are being compared but referred specifically to your dismissal of one of them as unscrupulous and deceptive, an opinion you concede as being controversial on another thread....

vixen1500

Frogletina wrote: »

I may withdraw the money in my Tesco accounts before the end of the tax year to make the most of this years ISA allowance, but then after 6th April I'll put it back in my Tesco accounts until June to make the most of the 3% interest. I'll lose a very small amount of interest for a couple of days, but if the regular savers reduce, I will have enough capacity in my ISA allowance.

frogletina

Jusr wondering what is to be gained in paying in to an ISA this tax year then withdrawing it after 6th April?

Frogletina

vixen1500 wrote: »

Just wondering what is to be gained in paying in to an ISA this tax year then withdrawing it after 6th April?

It's just to ensure I put the most I can into my ISA during this tax year.

Then when I withdraw it, it becomes part of my flexible allowance which can be replaced without it counting as new money in the new tax year.

frogletina

colsten

Reed_Richards wrote: »

Now, you need to unscrupulously fool each of these banks into thinking it holds your main current account

I know of no regular saver which requires you to have a 'main' current account with the provider. Not that there is an agreed definition of what a 'main current account' is

Reed_Richards wrote: »

If, like Frogletina, you have managed to somehow have enough regular saver accounts to pay in £5000 a month ......

Lots and lots of people have 'somehow' managed to have regular savings accounts that take £5K/mth between them. All you have to do is open the accounts, and then do the monthly deposits. These can be done by SO or manually.

It would be easier to do it all with one account but as no such one account exists, people have to decide whether they'd rather earn more interest or have an easier life and earn less. Emphasis on earn.