Resolved

mark_cycling00

Resolved now

Stargunner

You could also consider an ETF alternative, which is CSH2 and is available with HL, They both track the SONIA overnight rate so have virtually  the same returns. HL cap their charges on ETF’s in an ISA at £45 per year, which would reduce your fees.

mark_cycling00

Thanks, I didn't know that. Very useful 

Linton

mark_cycling00 said:

Choosing between a place for £40k that may need to access within year .. have 2 people's ISA allowance 

Vanguard ISA sterling mmf
Yield seems to be 4.45% right now
Fees = 0.25% of £40k
Annual profit= £1676

Royal London via HL ISA 
Yield seems to be 5.4% now
Fees = 0.45% of £40k
Annual profit= £1980

Tandem 5%
20% income tax due
Annual profit = £1600

So royal London seems to win. 

Have I got anything wrong? I found it difficult to get accurate yields.
Over a year there is a risk that the mmf yield falls but people on here seem to expect at least one more rate increase. 

Many thanks 

There is no such thing as an accurate yield.  Yield is a calculated number based on current price and the past years dividends/interest.  It is not a prediction and could vary depending on when and how frequently the dividend was paid in relation to the changes in nterest rates. eg the Vanguard dividend could have been earlier in the year than the RL dividend and so paid out at a time when interest rates were lower.

Stargunner

mark_cycling00 said:

Thanks, I didn't know that. Very useful 

An even cheaper solution would be to buy the Royal London fund with IWeb, as they do not charge fees for holding funds.

amanda1024

Top fixed rate cash isas offer a guaranteed 5.77% (https://www.moneysavingexpert.com/savings/best-cash-isa/#fixed), or £2,308, so that's what I'd go for. 90 days interest penalty to withdraw early though. Or 4.43% for easy access isa if you're more likely to need access - £1,772 - still beats most of your options

Stargunner

amanda1024 said:

Top fixed rate cash isas offer a guaranteed 5.77% (https://www.moneysavingexpert.com/savings/best-cash-isa/#fixed), or £2,308, so that's what I'd go for. 90 days interest penalty to withdraw early though. Or 4.43% for easy access isa if you're more likely to need access - £1,772 - still beats most of your options

If OP has to withdraw within the 12 month period they would be penalised £577 for  the 90 days loss of interest. Only they know whether that is likely.