Can we use a cash ISA account just like a normal 'easy access' savings account

J_B

Mrs B and myself have about 30k in Ulsterbank paying 4.25% AER

Could we transfer this into two cash ISAs and use it to dip in and out as we need for spending purposes?

eskbanker

It depends what you mean by 'in and out' - if you use flexible ISAs then you can withdraw and redeposit without the latter affecting your annual contribution allowances (i.e. redeposits are netted off withdrawals), but if you go with non-flexible ones then there's no such netting off and you're restricted to paying in no more than £20K/year.

winkowinko

As long as the ISAs are easy access, and don't have withdrawal restrictions (which most of them don't), then yes, they can be used in the same way as a savings account.

friolento

Presumably you are asking because you are both exceeding your personal savings allowance? Are you both basic or higher rate tax payers?

For dipping in and out regularly, you'd be hard pressed to find a flexible ISA with unlimited withdrawals and a decent interest rate. Trading 212 and Plum have promotional rates for 12 months but they are also known for difficulties when transferring out to other ISAs at the end of the 12 months, and the T&Cs of Plum are quite opaque and full of pitfalls.

J_B

https://forums.moneysavingexpert.com/discussion/comment/81964515#Comment_81964515

Cheers - we are both basic rate tax payers.

I've already has a Trading 212 ISA which I transferred (seamlessly) to Moneybox (last tax year)

ToastLady

If you want a flexible ISA, which means you can replace withdrawals within the current tax year, and not lose your ISA allowance for the year. Probably badly worded, but hope you get my drift. Have a look at

https://moneyfactscompare.co.uk/isa/easy-access-cash-isas/?quick-links-first=false&product-favorites-first=false&sort-order=AER&sort-order-text=Rate&id=null&business-type=16&activity-type=null&investment-amount=20000&investment-type=1&account-types=64&interest-paid-frequencies=null&terms=null&account-opening-methods=null&account-management-methods=null&notice-periods=1&include-notice-period=true&include-term=true&age=21&has-withdrawal-restrictions=1&existing-customers-only=2&is-shariaa=2&joint-account-only=2&flexible-isa-only=1

Above link is for top flexible ISA's with no withdrawal limits.

Edited to add, am not liking this new format where you cannot simply click on links. Also links are not shortened.

xylophone

Edited to add, am not liking this new format

I agree.

flaneurs_lobster

https://moneyfactscompare.co.uk/isa/easy-access-cash-isas/?quick-links-first=false&product-favorites-first=false&sort-order=AER&sort-order-text=Rate&id=null&business-type=16&activity-type=null&investment-amount=20000&investment-type=1&account-types=64&interest-paid-frequencies=null&terms=null&account-opening-methods=null&account-management-methods=null&notice-periods=1&include-notice-period=true&include-term=true&age=21&has-withdrawal-restrictions=1&existing-customers-only=2&is-shariaa=2&joint-account-only=2&flexible-isa-only=1

https://forums.moneysavingexpert.com/discussion/comment/81964618#Comment_81964618

Just hit return at the end of the link and it'll get shortened and, er, clickified - as above.

XzavierWalnut

If I can piggyback onto this thread, something I may need to look at in the next few years, which maybe of some use to the OP.
How do you go about having a cash ISA, whereby you can withdraw the interest and leave the initial deposit?
I have read articles where people have done this and had the interest paid into their normal bank account, but it was classed as income, so liable to income tax.
TIA

wmb194

https://forums.moneysavingexpert.com/discussion/comment/81964987#Comment_81964987

Those articles are incorrect or you've misunderstood them: interest earned in an Isa is tax free and it isn't taxable because you withdraw it - a withdrawal isn't classed as income.

ToastLady

https://forums.moneysavingexpert.com/discussion/comment/81964867#Comment_81964867

Thank you so much, that's great info.