Help with working out best interest rate

[Deleted User]

I've got an accumulated £27,000 over two Buckinghamshire Building Society regular saver accounts paying (currently) 1.2% pa and with instant access. This rate is after the rate has been reduced following the interest rate cuts in March so hopefully no further reduction.
The total interest earned on those accounts will be subject to 20% income tax in 2020/21 because of other interest using up my whole £1000 PSA.
I haven't yet put anything into a cash ISA this tax year.
I was thinking of moving £20K from Bucks BS into an NS&I Direct ISA paying 0.9% tax free. This seems to be the best instant access cash ISA currently available and would allow the money to be moved without notice if a better cash ISA rate becomes available.
Then it struck me that 1.2% less basic rate tax at 20% is slightly better than 0.9% tax free, and so there is nothing to be gained in making the move now. I might be as well to wait until towards the end of the tax year, or at least later in the tax year when cash ISA rates may have improved (unlikely, I know).
(I'm not thinking of investing any more in stocks and shares ISA at the moment due to market volatility).
(I have all the available RS and other non ISA cash accounts with better rates).
Is my reasoning reasonable?

El_Torro

Why not stick £27k in Premium Bonds? The expected return is 1.26% tax free, which beats both your current options.

Of course the 1.26% return isn’t guaranteed so you might get less (or more).

[Deleted User]

El_Torro said:

Why not stick £27k in Premium Bonds? The expected return is 1.26% tax free, which beats both your current options.

Of course the 1.26% return isn’t guaranteed so you might get less (or more).

El_Torro said:

Why not stick £27k in Premium Bonds? The expected return is 1.26% tax free, which beats both your current options.

Of course the 1.26% return isn’t guaranteed so you might get less (or more).

Great idea. many thanks. Will consider this.

exel1966

El_Torro said:

Why not stick £27k in Premium Bonds? The expected return is 1.26% tax free, which beats both your current options.

Of course the 1.26% return isn’t guaranteed so you might get less (or more).

Wholeheartedly agree, believe currently this is the best option and even with below average luck the overall return is likely to be very similar to putting it in a savings account after all considerations, but with the added bonus of a little fun thrown in each month. 
Download the NS&I Prize Checker app if you haven't already got it.

[Deleted User]

Hi,

so you've got £27K @ 1.2% = £324 int, less 20% tax £64.80 = £259.20.

Your ISA £20K @ 0.9% = £180,

remaining £7K @ 1.2% = £84 int, less 20% tax £16.80 = £ 67.20,

so total £180 + £67.20 = £247.20, which is £12 less, is it worth the hassle?

[Deleted User]

exel1966 said:

El_Torro said:

Why not stick £27k in Premium Bonds? The expected return is 1.26% tax free, which beats both your current options.

Of course the 1.26% return isn’t guaranteed so you might get less (or more).

Wholeheartedly agree, believe currently this is the best option and even with below average luck the overall return is likely to be very similar to putting it in a savings account after all considerations, but with the added bonus of a little fun thrown in each month. 
Download the NS&I Prize Checker app if you haven't already got it.

Thanks. Seriously thinking of going down the premium bond route.
When is the best date in the month to invest to get in the draw quickly. I'm thinking, invest on 5th July, get in draw 1 September. But invest on 31st Juky, get in draw 1st September, so best to invest late in the month. Have I got that right?

Albermarle

Deleted_User said:

exel1966 said:

El_Torro said:

Why not stick £27k in Premium Bonds? The expected return is 1.26% tax free, which beats both your current options.

Of course the 1.26% return isn’t guaranteed so you might get less (or more).

Wholeheartedly agree, believe currently this is the best option and even with below average luck the overall return is likely to be very similar to putting it in a savings account after all considerations, but with the added bonus of a little fun thrown in each month. 
Download the NS&I Prize Checker app if you haven't already got it.

Thanks. Seriously thinking of going down the premium bond route.
When is the best date in the month to invest to get in the draw quickly. I'm thinking, invest on 5th July, get in draw 1 September. But invest on 31st Juky, get in draw 1st September, so best to invest late in the month. Have I got that right?

Yes. Personally I would not literally wait until the last day of the month though, in case of admin /website problems.

lhsecons

I agree with the above idea re premium bonds but for future information NS&I direct ISA does not accept transfers in anyway. Al Rayan bank at 1% pays slightly more, if you can cope with what I find is a very complicated registration procedure.

[Deleted User]

Agree re premium bonds. But re NS&I Direct ISA, it wasn't going to be a transfer in of existing ISA money, it was to be a subscription of new non ISA funds. But point noted that transfers in aren't permitted.

lhsecons

Deleted_User said:

Agree re premium bonds. But re NS&I Direct ISA, it wasn't going to be a transfer in of existing ISA money, it was to be a subscription of new non ISA funds. But point noted that transfers in aren't permitted.

Sorry,
my fault for not reading it properly.

Swipe

exel1966 said:

Download the NS&I Prize Checker app if you haven't already got it.

I was about to do just that until I read the scathing reviews. I think I'll give it as miss. I'll know if I've won or not if it appears in my bank account.