Savings - ditch low rate ISA?

randomtom

Hello.

I'm currently re-evaluating my savings due to the rising rates. 've had a Natwest Help to Buy ISA for some years now, I can only pay in £200 a month, and the rate is around 2.5%. I'm already a home owner, so the bonus is irrelevant - it just so happened this was Natwest's best available ISA, which is why I've kept it for so long.

I'm thinking of withdrawing the entire balance and putting it into an easy-access account, either Tandem at 5%, or Chase at 4.1%. Are there any disadvantages to doing this? Either way, I will be earning less than the £1,000 personal threshold in interest. The plan would be to potentially use any interest earnings to overpay the mortgage (just renewed for 5 years at 3.98%). 

Many thanks,
Tom

grumbler

randomtom said:

The plan would be to potentially use any interest earnings to overpay the mortgage (just renewed for 5 years at 3.98%). 

For the amount you already saved there are fixed-rate savings accounts paying 6%+.

For monthly £200 there are regular savings accounts paying 6-7%.

It makes little sense to use Chase with their 4.1% when your mortgage costs you 3.98%.

xylophone

https://www.moneysavingexpert.com/savings/best-cash-isa/#twoyearfixed

Natwest offer two year fix on ISA at 5.9%.

Consider a Regular Saver for your £200 a month?

https://www.moneysavingexpert.com/savings/best-regular-savings-accounts/

Bigwheels1111

I keep my emergency fund in An isa and Tandem as of yesterday.
I will fund my four regular savers from tandem each month, 7.5%, 7.0%, 5.5% % 5.5%.