Can you have too many ISAs?

masonic

Langtang said:

masonic said:

Splitting up your ISA money too much means that much of it will not be earning a competitive rate of interest, but it is advisable to ensure you don't go over the FSCS limit with any of your savings.

I guess most money in an ISA won’t be earning much at present. I suppose part of my question would have been, is it best to have 4 £85k ISAs or 8 £42.5k ones?

It's generally best to have as much of your money as possible in the highest paying account(s) while observing the FSCS limit and your access needs. That could mean 12 x 1 year fixed rate ISAs spaced one month apart so you always have access to some of your cash, or it could mean ~£80k in a flexible ISA, withdrawn and put in a non-ISA savings account for most of the tax year.

Given that inflation is projected to be 2% in 2021 (with a range of forecasts from 1.0% to 3.7%), it is more a case of minimising loss of spending power rather than earning a real rate of return.

Langtang

masonic said:

Langtang said:

masonic said:

Splitting up your ISA money too much means that much of it will not be earning a competitive rate of interest, but it is advisable to ensure you don't go over the FSCS limit with any of your savings.

I guess most money in an ISA won’t be earning much at present. I suppose part of my question would have been, is it best to have 4 £85k ISAs or 8 £42.5k ones?

.....That could mean 12 x 1 year fixed rate ISAs spaced one month apart so you always have access to some of your cash, or it could mean ~£80k in a flexible ISA, withdrawn and put in a non-ISA savings account for most of the tax year.

Thanks for replying. I'm not sure I follow the last part above "...withdrawn and put in a non-ISA savings account for most of the tax year" Surely the idea is to have all monies in tax efficient wrappers? Am I missing something (obvious)?

masonic

Langtang said:

masonic said:

Langtang said:

masonic said:

Splitting up your ISA money too much means that much of it will not be earning a competitive rate of interest, but it is advisable to ensure you don't go over the FSCS limit with any of your savings.

I guess most money in an ISA won’t be earning much at present. I suppose part of my question would have been, is it best to have 4 £85k ISAs or 8 £42.5k ones?

.....That could mean 12 x 1 year fixed rate ISAs spaced one month apart so you always have access to some of your cash, or it could mean ~£80k in a flexible ISA, withdrawn and put in a non-ISA savings account for most of the tax year.

Thanks for replying. I'm not sure I follow the last part above "...withdrawn and put in a non-ISA savings account for most of the tax year" Surely the idea is to have all monies in tax efficient wrappers? Am I missing something (obvious)?

The idea is to earn as much after-tax interest as possible. The best paying accounts are often not ISAs, and most people can earn up to £1000 per tax year in non-ISA accounts before they pay any tax on interest.