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Ditch the ISA for NSI
Options

bfc_wurz
Posts: 12 Forumite

Hi all,
I already have the maximum savings I can in the new NS&I 1.16% bonds which comes in at just under £1000 a year tax free interest.
However Im lucky enough to have more savings than that (90k) sat in an ISA currently only giving me 0.5% (and this was a new one I opened this year so I don't have the option of opening another one).
My logic tells me that I would be better off taking all my money out of the ISA and sticking it in NS&I where I would still make more interest even after the tax deductions on my interest over the £1000 allowance. However I do appreciate that if I take it out I can only load it back into an ISA at 20k a year and the NS&I could change.
Has anyone else considered this and the pro's and cons??
Regards
C
I already have the maximum savings I can in the new NS&I 1.16% bonds which comes in at just under £1000 a year tax free interest.
However Im lucky enough to have more savings than that (90k) sat in an ISA currently only giving me 0.5% (and this was a new one I opened this year so I don't have the option of opening another one).
My logic tells me that I would be better off taking all my money out of the ISA and sticking it in NS&I where I would still make more interest even after the tax deductions on my interest over the £1000 allowance. However I do appreciate that if I take it out I can only load it back into an ISA at 20k a year and the NS&I could change.
Has anyone else considered this and the pro's and cons??
Regards
C
1
Comments
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bfc_wurz said:Hi all,
I already have the maximum savings I can in the new NS&I 1.16% bonds which comes in at just under £1000 a year tax free interest.
However Im lucky enough to have more savings than that (90k) sat in an ISA currently only giving me 0.5% (and this was a new one I opened this year so I don't have the option of opening another one).
My logic tells me that I would be better off taking all my money out of the ISA and sticking it in NS&I where I would still make more interest even after the tax deductions on my interest over the £1000 allowance. However I do appreciate that if I take it out I can only load it back into an ISA at 20k a year and the NS&I could change.
Has anyone else considered this and the pro's and cons??
Regards
C
...you can have a £1 million of NS&I Income Bonds (https://www.nsandi.com/income-bonds), and 1.16% of a million is £11,600.
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bfc_wurz said:Hi all,
I already have the maximum savings I can in the new NS&I 1.16% bonds which comes in at just under £1000 a year tax free interest.
However Im lucky enough to have more savings than that (90k) sat in an ISA currently only giving me 0.5% (and this was a new one I opened this year so I don't have the option of opening another one).
My logic tells me that I would be better off taking all my money out of the ISA and sticking it in NS&I where I would still make more interest even after the tax deductions on my interest over the £1000 allowance. However I do appreciate that if I take it out I can only load it back into an ISA at 20k a year and the NS&I could change.
Has anyone else considered this and the pro's and cons??
Regards
C1 -
As tcallaghan93 says in https://forums.moneysavingexpert.com/discussion/6172002/20k-fixed-rate-savings-premium-bonds-other-ideas#latest , Premium Bonds are worth considering now; the prizes are tax free, and the median effective interest rate (ie half of people get above this, half below) is about 1.3% now. That's a maximum of £50,000. But yes, you do lose the ISA privileges for money you take out of one now. You could transfer existing cash ISAs into stocks and shares ISAs, if you'd be happy with investment with possible losses as well as possible larger gains.0
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bfc_wurz said:However Im lucky enough to have more savings than that (90k) sat in an ISA currently only giving me 0.5% (and this was a new one I opened this year so I don't have the option of opening another one).2
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eskbanker said:bfc_wurz said:However Im lucky enough to have more savings than that (90k) sat in an ISA currently only giving me 0.5% (and this was a new one I opened this year so I don't have the option of opening another one).0
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tcallaghan93 said:bfc_wurz said:Hi all,
I already have the maximum savings I can in the new NS&I 1.16% bonds which comes in at just under £1000 a year tax free interest.
However Im lucky enough to have more savings than that (90k) sat in an ISA currently only giving me 0.5% (and this was a new one I opened this year so I don't have the option of opening another one).
My logic tells me that I would be better off taking all my money out of the ISA and sticking it in NS&I where I would still make more interest even after the tax deductions on my interest over the £1000 allowance. However I do appreciate that if I take it out I can only load it back into an ISA at 20k a year and the NS&I could change.
Has anyone else considered this and the pro's and cons??
Regards
C
...you can have a £1 million of NS&I Income Bonds (https://www.nsandi.com/income-bonds), and 1.16% of a million is £11,600.0 -
bfc_wurz said:eskbanker said:bfc_wurz said:However Im lucky enough to have more savings than that (90k) sat in an ISA currently only giving me 0.5% (and this was a new one I opened this year so I don't have the option of opening another one).0
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bfc_wurz said:tcallaghan93 said:bfc_wurz said:Hi all,
I already have the maximum savings I can in the new NS&I 1.16% bonds which comes in at just under £1000 a year tax free interest.
However Im lucky enough to have more savings than that (90k) sat in an ISA currently only giving me 0.5% (and this was a new one I opened this year so I don't have the option of opening another one).
My logic tells me that I would be better off taking all my money out of the ISA and sticking it in NS&I where I would still make more interest even after the tax deductions on my interest over the £1000 allowance. However I do appreciate that if I take it out I can only load it back into an ISA at 20k a year and the NS&I could change.
Has anyone else considered this and the pro's and cons??
Regards
C
...you can have a £1 million of NS&I Income Bonds (https://www.nsandi.com/income-bonds), and 1.16% of a million is £11,600.
Oh haha sorry my bad.
So your choices are:
1. Keep it tax free in an ISA
2. Between you and your partner buy £90k NS&I premium bonds, all "interest" or prizes are tax-free
3. Buy £90k income bonds for the guaranteed interest and take the tax hit.
4. If you already have that much cash, why not transfer the cash ISA to a stocks & shares ISA?2 -
bfc_wurz said:eskbanker said:bfc_wurz said:However Im lucky enough to have more savings than that (90k) sat in an ISA currently only giving me 0.5% (and this was a new one I opened this year so I don't have the option of opening another one).2
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