Ulster Bank ISA v Marcus Savings Account

OliverNW3

Hi

I have some money in a Cash ISA with Ulster Bank but their rates are really low (0.25% for the first 25k, and 0.80% for 25+, and only paid on the last day in October).

I have literally just hit the 25k, but I've noticed the Marcus account giving 1.45% for new joiners. Is there any point in having the Cash ISA?

I also have a small amount in a Help To Buy ISA (not breaking any rules, as Ulster Bank allow both Cash and HTB ISAs as long as the limit remains 20k per tax year) which I will keep, and I'm paying into First Directs Regular Saver account which offers 5% but is limited to £300 per month and ends after one year.

I'm just wondering if there is any benefit to having the Cash ISA at all when it's such a low rate?

What would you guys do, withdraw from the Cash ISA and put into Marcus to take advantage of the better rate?

Thanks for any advice!

colsten

The Ulster ISA rate is dreadful and you should move your money. Where to? It all depends on your personal circumstances and needs. If you are a basic rate tax payer and plan to spend the money in the next few years, you have a tax-free £1,000 interest each year outside of an ISA, and you might as well go for a savings account - instant access, or fixed term, or a combination of the two. If you are a higher rate tax payer, you only have £500 interest tax-free outside of an ISA, and an ISA can provide better value. If you are saving long-term, you should look at investments, for example in an S&S ISA wrapper.

You can get around 1.5% is several cash ISAs: https://www.coventrybuildingsociety.co.uk/consumer/savings-accounts/cash-isa.html

You can also get 1.6% in an instant access account - https://forums.moneysavingexpert.com/discussion/6047454/mse-news-new-sharia-account-offers-1-6-easy-access-savings-but-should-you-get-it

OliverNW3

Thanks.

I think I'll wait to the end of the month to get the small interest then move it to Marcus, or look into those other Cash ISAs you mentioned. As Martin said on BBC 5 recently, if you're not getting 1.45% you need to ask why as that's now the basic you should expect.

I will keep the H2B ISA and might try to find a provider who will give me a LISA and put some money there.

YorkshireBoy

OliverNW3 wrote: »

I think I'll wait to the end of the month to get the small interest then move it...

The end of the month is tomorrow! But even if it wasn't, interest will be paid up on either closure or transfer. In other words, nothing to gain by waiting, but some to lose.

OliverNW3

Thanks - I meant end of October - but I've actually decided to get the ball rolling and request a transfer to a Fixed Rate ISA with Coventry Building Society. I was thinking I'd lose any interest earned as it wasn't due until last business day of October, but since it's quite a measly rate there wouldn't be much to lose even if I did!

OliverNW3

Just to clarify, I'll keep Marcus as well as it's Easy Access and a decent rate.