Need some advice with my ISA account and Savings account.

trinidadone

Hello all, I currently have a ISA with over 70K paying 0.4% I also have a easy access savings account with over 60K also paying 0.4% It seems locking in money seems to attract the better returns. Anyone have any suggestions on what account/s to use? Should I close the ISA account and deposit into the savings?  

eskbanker

Unless you're likely to need access to £130K of cash in the foreseeable future, it would probably be worth considering investing some of it rather than sticking to saving, maybe even transfer the whole £70K into a S&S ISA?

Albermarle

You only need to save in a cash ISA, if you think you will earn more than £1000 interest in this tax year. That is because for a basic rate taxpayer you can earn this much interest tax free . ( Only £500 for a higher rate taxpayer)

Normally non ISA accounts have a better interest rate than ISA's.

Here is a link to a comparison site for savings accounts .
Compare The Best UK Savings Accounts | moneyfacts.co.uk

As mentioned above , you might consider investing some of it . Either via a S&S ISA or by adding more to your pension.

MoJoeGo

...and if you are averse to the risks that go with investing, consider this - the current CPI measure of inflation is 2.4%. That means your 130k of savings (sat earning 0.4%) is effectively losing £2600 of value each year in terms of its purchasing power.

Inflation varies of course, but it's quite possible that it's going to rise even further. So right now, there is no way to preserve the real value of your money unless you are prepared to take some risk...

Savings accounts can protect your capital... but they can't protect the value of that capital...

Alexland

Albermarle said:

You only need to save in a cash ISA, if you think you will earn more than £1000 interest in this tax year. That is because for a basic rate taxpayer you can earn this much interest tax free . ( Only £500 for a higher rate taxpayer)

Some of us also prefer ISAs as unwrapped income would play into our adjusted net income for child benefit etc.