Cash ISA option advice please

miabrown

Hi all. I have 80K already in an ISA and am just coming out of a 1 year deal. I have also 20K ready to put in for my entitlement this year. I do not need to touch my 1st 80K, so can lock it away and prefer to leave it in a Cash ISA.
I think my options are:
a) Put 80K into 1yr fix at 5%
b) Put 80K into 5yr fix at 4% (ish) - in case interest rates fall dramatically over the next 5 yrs.

Also put my new 20K into the best 1yr deal I can.
Any thoughts/advice please? Thanks Mia

kempiejon

miabrown said:

Hi all. I have 80K already in an ISA and am just coming out of a 1 year deal. I have also 20K ready to put in for my entitlement this year. I do not need to touch my 1st 80K, so can lock it away and prefer to leave it in a Cash ISA.
I think my options are:
a) Put 80K into 1yr fix at 5%
b) Put 80K into 5yr fix at 4% (ish) - in case interest rates fall dramatically over the next 5 yrs.

Also put my new 20K into the best 1yr deal I can.
Any thoughts/advice please? Thanks Mia

Assuming you've done the other bits of thinking about your other cash, pensions etc and this is just an ISA question is it really just one or the other? Will you only get 5% for one year or 4% for 5 years if you invest £80k?
I have no idea which is best but you won't be totally wrong with £40k in each option or as you're prepared to lock that new £20k for a year why not £50k in each?

Albermarle

miabrown said:

Hi all. I have 80K already in an ISA and am just coming out of a 1 year deal. I have also 20K ready to put in for my entitlement this year. I do not need to touch my 1st 80K, so can lock it away and prefer to leave it in a Cash ISA.
I think my options are:
a) Put 80K into 1yr fix at 5%
b) Put 80K into 5yr fix at 4% (ish) - in case interest rates fall dramatically over the next 5 yrs.

Also put my new 20K into the best 1yr deal I can.
Any thoughts/advice please? Thanks Mia

Fixing savings rates/terms is a gamble on their future direction, so as nobody can see into the future then nobody can really advise you on what is best.

Some say 5 years is a long time, as many things can happen in the meantime. Not just to interest rates but also personally. So maybe best to put some of the money in a two or three year deal to hedge your bets,