Cash ISA query

kev2009

Hi all,

Currwently have a Cash ISA which allows me to withdraw money 6 times a year and put back.  The rate is now dropping to 3.25%.  I see another account with same provider for 3.7%, dropping soon to 3.6% which allows 6 withdrawals also.

Similar there is another one with another provider paying just over 4% with unlimited withdrawals but cannot put back. 

Is it worth switching yet or wait until interest rate announcements next month I believe and see what the rates are as potentially if the 3.6% drops again, it wont be much better than the 3.25% I have ATM, albeit that will likely drop to.

Thanks

Kev

El_Torro

Such is the problem with easy access saving accounts. The provider with the highest interest rate will change quickly and often. 

It's up to you to decide how often to change and with what incentive. Personally if I had a flexible Cash ISA at 3.6% I probably wouldn't bother moving the money to a non flexible Cash ISA at 4%. 

allegro120

Personally I don't think it is worth looking at any ISAs paying below 4%, certainly not today.  Nobody knows when and to what extend the rates will drop  I have several ISA accounts, one of them was recently reduced to 3.95% and it is already in the process of transferring to a better paying account.  I've made a lot of ISA transfers this financial year and more transfers are likely to take place.  It's a faff, but helped to get higher returns.

It always depends on what you need from ISA.  If flexible (money in and out without affecting your allowance) ISA is what you need then the choices are limited.  The same goes to withdrawal restrictions.  If you know you won't need this money for a period of time it could be worth looking at fixed products.

I've recently fixed some of my ISA money at 4.3% for 1 year, and the rest of it will carry on traveling to better paying destinations.

The bottom line is - if you want a better return it is worth looking at what is currently available. https://www.moneysupermarket.com/savings/goals/?goal=SAV_CASHISA
Most of these don't stay on the shelf for very long and the rates are on the way down, so sooner you grab it the better.

Malchester

allegro120 said:

Personally I don't think it is worth looking at any ISAs paying below 4%, certainly not today.  Nobody knows when and to what extend the rates will drop  I have several ISA accounts, one of them was recently reduced to 3.95% and it is already in the process of transferring to a better paying account.  I've made a lot of ISA transfers this financial year and more transfers are likely to take place.  It's a faff, but helped to get higher returns.

It always depends on what you need from ISA.  If flexible (money in and out without affecting your allowance) ISA is what you need then the choices are limited.  The same goes to withdrawal restrictions.  If you know you won't need this money for a period of time it could be worth looking at fixed products.

I've recently fixed some of my ISA money at 4.3% for 1 year, and the rest of it will carry on traveling to better paying destinations.

The bottom line is - if you want a better return it is worth looking at what is currently available. https://www.moneysupermarket.com/savings/goals/?goal=SAV_CASHISA
Most of these don't stay on the shelf for very long and the rates are on the way down, so sooner you grab it the better.

Or for a much better choice use moneyfacts compare with their filters. I find it far better than moneysupermarket tables

Ocelot

I always assume rates are going continually down, so I personally choose fixed rate ISAs.

If you want a flexible or easy access ISA, you either keep it where it is or chase the rates, but be prepared to move often if the latter.

saajan_12

kev2009 said:

Hi all,

Currwently have a Cash ISA which allows me to withdraw money 6 times a year and put back.  The rate is now dropping to 3.25%.  I see another account with same provider for 3.7%, dropping soon to 3.6% which allows 6 withdrawals also.

Similar there is another one with another provider paying just over 4% with unlimited withdrawals but cannot put back. 

Is it worth switching yet or wait until interest rate announcements next month I believe and see what the rates are as potentially if the 3.6% drops again, it wont be much better than the 3.25% I have ATM, albeit that will likely drop to.

Thanks

Kev

The main question is do you want / need the flexibility? In the context of ISAs that means something specific: it allows you to withdraw and re-deposit money in the same tax year without using up more of your allowance. You  might need this if
* if you don't have sufficient non-ISA savings to be an emergency fund meaning you may need to dip into the ISA money
* if you (almost) max out your 20k allowance so if you withdrew you couldn't re-deposit in a non-flexible ISA without exceeding the allowance. 
* if you pay little tax on savings so its worth withdrawing, getting the higher return on a non-ISA account and re-depositing

Personally the above doesnt' apply to me so I'd take the extra 0.4%.. that's £40 on a £10k pot. However depends on your individual set up. 

Albermarle

I read an article about the possible future direction of UK interest rates.
Apparently economists are predicting two 0.25% cuts in 2026, based on higher unemployment and lower wage growth/lower inflation, and then stability around the 3%/3.25% area.
Future market indications are for no reductions, but the market was a poor indicator last year.
Almost nobody expects a cut at the February 5th meeting or even the March 19 th one.

Of course unexpected events could change things.

kev2009

Thanks all.
I don't currently need the money in my ISA BUT should unforeseen expenses arise then I would need to access some of the money so this is the dilemma.
At present, I don't have any money to put in a ISA so flexible ISA isn't really a major issue, its more being able to withdraw some money without incurring charges/loss of interest/account closure etc.
I was tempted by a fix but as I say if certain events happen then I will require access but unfortunately I cannot foresee when those will happen hence I was thinking fix for a year but I best go with an account I can access funds as I have other money at the moment but I'm planning to OP mortgage in not too distant future so that will make a dent in my savings.
I am aware of the BS paying just over 4% but historically they occasionally come out with an account with decent interest but generally soon plumet.

My existing isa only pays 3.25% but it just continues each year, if i sign up to the 3.7%, soon to be 3.6% then that will move to a mature isa in a years time and I can then obviously move it to a different account.

I'm tempted by the 3.7%/3.6% as in the last interest rate cut, they didn't drop that account by much.

Will think on it, considering moving to it before it goes but also tempted to wait till Feb and see what happens then.

Thanks

Kev

elkiedee

Slightly different opinion on your savings.

I think that if a better rate is on offer from the same provider on similar terms and conditions, you have nothing to lose by moving your ISA now, before that rate goes. Comparing current rates, planned cuts, there is still a .35% difference in the interest you'll get. There may be future cuts but if these are 0.25% to each again, there will still be a difference. And because it's the same provider, you can probably move the money to a higher rate almost immediately, without losing interest due to a delay between money leaving the old account and arriving in the new one.

As you can then make up to 6 withdrawals without an interest penalty, you can also still look at better rates on terms that suit your needs elsewhere.

And if you anticipate that you might need just part of your savings in the short term, you could split the money and move some elsewhere to get a better rate. You might need to check the rules if you want to do this - ISA rules let you have more than one ISA but savings providers or accounts may have particular conditions on accepting transfers/partial transfers.

My ISA savings rates at 3 different building societies/banks are all being cut by similar amounts, and I'm probably going to move a lot of the money from the largest account to the one which will still be paying a slightly higher rate, monthly rather than annually. I'll probably start doing it some time this week as it's in a one year triple access account that comes to term. I will still keep some money with Nationwide for ease of access, and also, while their interest rates are not the best available, they have offered some extra payouts and other loyalty deals in the last 3 years. I got £150 last year and £100 in 2024, in addition to headline interest rates, but those payments would have been on the same on anything over £100 in a qualifying savings account.

kev2009

@elkiedee Thanks, yes, I think I'm going to move it to the 3.7% (soon to be 3.6% with same provider.  As you can see after last interest rate cut, this time only dropping 0.1% not the full 0.25% so maybe it will only drop 0.1% if lowered in Feb.

Yes, i am also with Nationwide and have also benefited from the one off pay-outs. I keep some savings in there and use it mainly as easy access savings in a non-isa and also build up money to then OP on mortgage so I can reduce monthly expenditure a little to hopefully offset some of the other rising costs.

Thanks for your reply and useful information.

Kev

kev2009

Just opened it, however seems issue with website as either cannot login or get logged in but site is all over the place, mainly all on the left. I once managed to get to isa transfer bit but site didn't look right in layout so stopped.  Tried on 2 different computers and mobile on mobile network.  Mobile lets me login but soon as go isa transfer says unavailable/unreachable.
I've msged them, waiting reply as suspect site issues. Failing that I got to call them i guess but sooner do it online tbh its only few mins verses prob longer on phone.
Was a message about new website layout etc, doesn't look like it gone very well, I've even cleared cache/temp files in browser etc.
App on mobile doesn't do isa transfer, it takes you to login to website

Have to try tomorrow, not sure how long i got to do transfer but must allow few days I suspect.

Kev