best ISA investments

desalilic

My cash ISA matures this month and I am wondering what to do next:

1) transfer to the best cash ISA bank account (1-2 yr fixed with 0.6% interest) 

2) invest into ISA shares with a financial platform (transfer & handling charges for my 80K cash ISA would be £3500 - is this a reasonable cost?)

Thnx

desa

 

eskbanker

If you're considering investing in a S&S ISA then don't approach it from the same perspective as a cash one, in that saving and investing are two very different things, requiring a different mindset.  That's not to say that costs don't play a part in the latter, but they shouldn't be the dominant factor when weighed against objectives, timescales, strategies, etc - however, those you quote sound hugely excessive so are perhaps indicative of a suboptimal approach.

A transfer from a cash ISA to a S&S ISA shouldn't entail any 'transfer and handling charges', although you may have dealing charges when purchasing the investments themselves, and are likely to have ongoing custody charges thereafter - who are you looking at transferring to, and why?

underground99

desalilic said:

My cash ISA matures this month and I am wondering what to do next:

1) transfer to the best cash ISA bank account (1-2 yr fixed with 0.6% interest) 

2) invest into ISA shares with a financial platform (transfer & handling charges for my 80K cash ISA would be £3500 - is this a reasonable cost?)

Thnx

desa

It depends whether you want the certainty of short term returns from cash or you have a goal to grow the money over a longer time period in which case you could consider investment via S&S.  If you do, the answer for 2 is that £3500 (4.4% of the amount involved) is not a reasonable cost for 'transfer and handling'). For most ISAs the transfer-in can be done for free and you can pick your own investments which will cost some fraction of a percent ongoing each year for account maintenance and investment management. Perhaps the £3500 you are being quoted is for some complex investment advice?

dunstonh

2) invest into ISA shares with a financial platform (transfer & handling charges for my 80K cash ISA would be £3500 - is this a reasonable cost?)

Most S&S ISAs have no initial charges or transfer charges.    Nowadays, the only initial charges tend to be where an adviser is involved and that is for the cost of advice.  And for £80k, you would be aiming that to be around £1600 (not £3500 - although there are some greedy firms out there that charge that amount).  So, £3500 is not a reasonable amount under advice and certainly not even close to reasonable if its DIY.

If you are looking at the annual costs included in that figure (which you shouldn't do) then it may be more reasonable as a total but we lack sufficient information to be able to say.

You will have charges with investments as they charged explicitly.  Unlike savings where the charges are implicit (you dont see them but charges exist - they just reduce the interest rate to the level to build in the hidden charge).   Using an FA is usually the most expensive option. Using an IFA is usually a bit cheaper and going DIY cheaper still.  Although DIY means you need to know how to DIY.

jimjames

desalilic said:

2) invest into ISA shares with a financial platform (transfer & handling charges for my 80K cash ISA would be £3500 - is this a reasonable cost?)

Which platform is charging you that for transfer and handling fees? That should be free, I've not seen any of the mainstream ones charge to transfer money to them and certainly not that sort of level so no I don't think that is reasonable. But is it what you have described or is it a charge for something different like advice?

Eyeful

1. This does not sound a "reasonable charge"

2. What is the name of the platform you are thinking of going with? How did you find out about them?

3. What investments are you thinking of investing in.

4. With investing you are putting your money at risk . You can get less out than you put in.

5. Stay in a low risk cash ISA until you are sure you want to invest!

desalilic

To all - many thnx for above comments & advice! Really vey helpful!
desa

jimjames

desalilic said:

To all - many thnx for above comments & advice! Really vey helpful!
desa

Can you name the platform? It would be useful for others to know which one has those sorts of charges?

The_Fat_Controller

If you don't need to access the funds for years, consider a S & S ISA and pick a good Investment Trust via Hargreaves Lansdown.

There will be an initial dealing fee when you invest but after that fees are very reasonable.

My ISA is invested in a single IT, currently valued at £920,000 and the annual fees from HL are £45 !

Fees for dividend reinvestment are very reasonable too.

The IT also has internal fees but these are not charged to the investor directly and are clearly visible.

AnotherJoe

desalilic said:

My cash ISA matures this month and I am wondering what to do next:

1) transfer to the best cash ISA bank account (1-2 yr fixed with 0.6% interest) 

2) invest into ISA shares with a financial platform (transfer & handling charges for my 80K cash ISA would be £3500 - is this a reasonable cost?)

Thnx

desa

 

Since it should be zero, NO !

Why are you being so coy about who this transfer would have been to?