Fixed rate cash Isa or invest?

hoofy

I have a 5yr ISA with Charter savings bank paying 2.15%. The 5yr period is up in August 22 and I'm wondering what posters thoughts are on transferring the ISA to IWeb where I would invest it in a fund yet to be decided on.

Transferring the ISA would mean I incur a loss of 180 days interest on the £20000 so a charge of £215.

Of course, it's going to depend on how I would invest the money as to whether or not it turns out to be a good/bad idea.

My inclination is to do the transfer, would you?

eskbanker

Everyone else will have different financial circumstances, so the plans and actions of other posters won't be directly relevant to you.  Why would you be looking to change from saving to investing?

hoofy

eskbanker said:

Everyone else will have different financial circumstances, so the plans and actions of other posters won't be directly relevant to you.  Why would you be looking to change from saving to investing?

 I think I have a reasonable chance of earning more than the 2.15%?

I don't need the money for anything, just speculation.

Albermarle

2.15% is significantly more than inflation ,and unlike investments it is guaranteed,  so I would not transfer out and incur a penalty.
Once the fixed rate period was up, then would be a better time to consider your options.
If you read this forum regularly ( lots of people ask very similar questions about where best to put their money - savings- pensions - S&S ISA's etc ) and by August 22nd you will be much better informed and the correct option may become obvious. 

eskbanker

hoofy said:

eskbanker said:

Everyone else will have different financial circumstances, so the plans and actions of other posters won't be directly relevant to you.  Why would you be looking to change from saving to investing?

 I think I have a reasonable chance of earning more than the 2.15%?

I don't need the money for anything, just speculation.

I'd agree that investing should give better returns than 2.15% over the long term, so is potentially a better idea than saving that money in cash deposit form if you already have enough readily accessible cash elsewhere and are confident that you won't need to access this pot for 5+ years.  However, when you opened the five-year savings account, you presumably felt happy to leave it there for the term but you're revisiting that decision three and a half years later, so best be aware that circumstances can and do change....

cattie

Personally I'd leave the money where it is & in the meantime concentrate on saving new money to put into a S&S. I'd be quite happy with the 2.15% interest rate compared to what you can get elsewhere currently.

Whether iweb would be right for you then is debateable as they are good for lump sums & not too many trades.  When the cash isa matures in 2022, then I'd look to transferring over into my S&S is.

Have a look here to see who would be cheapest for you if you started a new regular or lump sum S&S isa before making up your mind. https://monevator.com/compare-uk-cheapest-online-brokers/

Currently I use 2 different platforms, iweb & Fidelity as they work out most cost effective for me. 

It isn't wise to tie all your money up in S&S investments though, you need to be able to have an instant access savings account too, or Premium Bonds so you can get your hands on some money in an emergency.

hoofy

Albermarle said:

 by August 22nd you will be much better informed and the correct option may become obvious. 

Sorry, I should have said Aug 2022 rather than just 22. If it was this August I would probably leave it, but it is 18 months away, so I think I am inclined to do the transfer and take the consequences, good or bad.

I still have 2 more fixed rate ISAs earning 2.6% average with 70k so I'll leave those and move the Charter one.