Low interest cash ISA 18 January at 11:30AM in ISAs & tax-free savings 7 replies 266 views

masonbuilder

I'm lucky enough to have £85,000 in a cash isa but in comparison to todays interest rates its low. what should I do to transfer some or all of it into a better paying isa ?

eskbanker

masonbuilder said:

I'm lucky enough to have £85,000 in a cash isa but in comparison to todays interest rates its low. what should I do to transfer some or all of it into a better paying isa ?

1. Open better paying ISA.
2. Use new provider's ISA transfer process to transfer some or all of the balance.
3. Er, that's it....

400ixl

Do you need the ISA wrapper? Have you (and partner if applicable) used all of your savings tax allowance?

It could be you can just put it in non ISA account for a higher rate and not pay tax on the interest (or even with tax) could still see a better return than an ISA.

Worth considering alongside the options above if you are not using your tax allowance.

Albermarle

masonbuilder said:

I'm lucky enough to have £85,000 in a cash isa but in comparison to todays interest rates its low. what should I do to transfer some or all of it into a better paying isa ?

Is it an easy access cash ISA, or is it in a fixed rate/term cash ISA?

Reed_Richards

You should find two better ISAs with different (and financially separate) providers, transfer some of the ISA into one account and the rest into the other.  That way you don't risk breaching the £85k compensation limit.  If you have made any ISA contributions this year, that money must not be split so you'll have to specify which of the two providers gets that money.

If you have £85,000 and can get a decent rate of interest then you almost certainly do need that ISA wrapper.

xylophone

https://www.barclays.co.uk/savings/isas/1-year-flexible-cash-isa/ might be worth a look.

It is much quicker to open this ISA if you are a Barclays customer -  see

https://forums.moneysavingexpert.com/discussion/comment/79759656/#Comment_79759656

You do need to be a  Virgin customer for this

https://uk.virginmoney.com/savings/products/easy_access_cash_isa_exclusive_issue_2/

tlsawbo

Just used Martin's new calculator and found I/we could move our fixed rate ISAs to a better rate even with loss of interest.
Brilliant.
Isa vs savings account - Use MSE's switching calculator to find what's best for you (moneysavingexpert.com)
As a geek I'd love to know the formula that was used.

eskbanker

tlsawbo said:

As a geek I'd love to know the formula that was used.

A true geek would be able to work it out

It's not hugely complex, you just calculate the penalty charge and then work out how long it takes to recoup that via the extra interest - if that's within a payback period that you're happy with then it's worth doing....