ISA variable or fix?

caeler

I’m ready to fund an ISA with new money. I have a few previous years in a trading 212 account so that seems an obvious choice at 4.5% but equally I don’t need the cash (and won’t need it for the foreseeable) and wonder if I’d be better off fixing for a year with secure trust bank etc at c4.3% I know none of us know what interest rates will do this year! 

I keep going around in circles! WWYD? 

wmb194

caeler said:

I’m ready to fund an ISA with new money. I have a few previous years in a trading 212 account so that seems an obvious choice at 4.5% but equally I don’t need the cash (and won’t need it for the foreseeable) and wonder if I’d be better off fixing for a year with secure trust bank etc at c4.3% I know none of us know what interest rates will do this year! 

I keep going around in circles! WWYD? 

It doesn’t have to be all or nothing, you could do 50/50.

jimjames

caeler said:

I keep going around in circles! WWYD? 

If I don't need the money then I wouldn't be keeping it in a cash ISA, I'd use S&S ISA or pension

caeler

Thanks @jimjames I'm paying right up to the annual allowance into my pension right now and I must admit I struggle with the idea of S&S ISA, I've read a few guides but don't like the idea of risk.  Given what a downturn I've seen in my pension this week...! 

Albermarle

caeler said:

Thanks @jimjames I'm paying right up to the annual allowance into my pension right now and I must admit I struggle with the idea of S&S ISA, I've read a few guides but don't like the idea of risk.  Given what a downturn I've seen in my pension this week...! 

Investment risk is somewhat misunderstood, at least in terms of long term 'buy and hold' investing.

As long as you stick to mainstream diversified investments, the risk of loss diminishes over time, and the potential growth increases. As long as you stick at it long term, it is still a gamble of sorts but one with the odds heavily stacked in your favour.
So if you stay only with cash savings, you are in fact taking a big risk that your returns will be modest, compared to what could be achieved by investing.

Also your pension is invested, so why baulk at doing the same in a S&S ISA ? 
Your pension pot is down this week, but how has it grown in the last 10 years?
A typical pension fund is down about 8% ( maybe 10% a couple of days ago), but the same fund will have grown 50/60% in the last 5 years ( maybe even 70% before the current 'fun' started) 

caeler

Right, I’ve done it… I’ve now got a S&S ISA! Okay most went in a variable cash ISA and a tiny bit went into the S&S! I’m with Trading 212 for both. No idea what pie I’m going to choose! 🤣🤣

slinger2

caeler said:

Right, I’ve done it… I’ve now got a S&S ISA! Okay most went in a variable cash ISA and a tiny bit went into the S&S! I’m with Trading 212 for both. No idea what pie I’m going to choose! 🤣🤣

With Trading 212, moving money between their S&S ISA and their Cash ISA is very easy (either way), so you can change your split between the two at any time.

caeler

slinger2 said:

caeler said:

Right, I’ve done it… I’ve now got a S&S ISA! Okay most went in a variable cash ISA and a tiny bit went into the S&S! I’m with Trading 212 for both. No idea what pie I’m going to choose! 🤣🤣

With Trading 212, moving money between their S&S ISA and their Cash ISA is very easy (either way), so you can change your split between the two at any time.

Cheers, I did wonder if it would be simple. 👍