ISA advice

eskbanker

Smithers37 said:

jimjames said:

Smithers37 said:

Band7 said:

Smithers37 said:

I personally stay away from cash ISAs, the rates aren’t worth it as a rule.

Cash ISAs my not be worth it for yourself but there is no rule to say they aren't worth it for everyone else, too. For HR tax payers, they can be a no-brainer for keeping their emergency cash float in, for instance. 

 move because of the rates, which is why I mentioned that the rates are rarely very good.

That's just not true anymore. Virgin is paying 3% for instant access ISA

But inflation is currently at around 10%. You’re losing around 7% by keeping cash at 3%. You were better off with a 0.1% rate when inflation was at 2.5%. 

I don't think anyone was suggesting that cash deposits (whether in ISAs or taxable savings accounts) would be suitable for keeping pace with inflation, so if your argument against cash ISAs is that their growth is typically (especially over the long term) lower than S&S ISAs, then that's really a fundamental feature of the generic 'saving versus investing' debate, rather than anything to do with the ISA wrapper as such.

Everyone else in the thread seems to be weighing cash ISAs against taxable savings accounts, which is generally the more meaningful comparison for those for whom investing isn't suitable for various (legitimate) reasons.

jimjames

Smithers37 said:

jimjames said:

Smithers37 said:

Band7 said:

Smithers37 said:

I personally stay away from cash ISAs, the rates aren’t worth it as a rule.

Cash ISAs my not be worth it for yourself but there is no rule to say they aren't worth it for everyone else, too. For HR tax payers, they can be a no-brainer for keeping their emergency cash float in, for instance. 

 move because of the rates, which is why I mentioned that the rates are rarely very good.

That's just not true anymore. Virgin is paying 3% for instant access ISA

But inflation is currently at around 10%. You’re losing around 7% by keeping cash at 3%. You were better off with a 0.1% rate when inflation was at 2.5%. 

I agree it's losing to inflation but you have little choice but to keep emergency funds in cash. Most of my money is invested, cash is around 5% of the total but still needed as easy access.