ISA Newbie

BlondMelon

I'm 50 and have 40K in various regular savings accounts and have never had an ISA. I need to sort my savings into something better. I've seen the Coventry building society fixed ISA at 4.6%, but due to recently being made redundant I need to have flexibility incase I need to use the money. What would you suggest my best saving options would be to divide and save this amount. My daughter says I should get Trading 212 and start saving better. But its all a bit overwhelming.

mon3ysav3r

The rules are different for fixed Cash ISA's than normal fixed savings accounts, even though they might say you can not access the funds during the term "Fixed cash ISAs must let you withdraw money, although they will normally charge an interest penalty".

Obviously I don't know your circumstances, but it sounds like putting the max 20K into this tax years Cash ISA would mean you pay less tax. Next tax year from 06 April 2027 the rules have changed and you can only put 12K into a Cash ISA.

Albermarle

You have to be clear that there are two separate decisions to be made here.

The first decision is do you want an easy access savings account with a variable interest rate, or an account with restricted access ( for example for one year) but with a fixed interest rate?

Then when you have decided that, the second decision is whether to have an ISA savings account, or a non ISA one.

All interest generated in an Cash ISA is 100% tax free, whilst for non ISA accounts some interest can be earned tax free, but some maybe taxable depending on how much interest there is, and your own income.

However cash ISA's have some downsides, such as you can add max 20,000 Pounds a year and there are rules about withdrawing, transferring that do not apply to non ISA accounts.

All types of savings accounts, like easy access, fixed term etc are available as ISAs or ordinary savings accounts.

As you are just learning I would avoid some of the newer players like T212, as they often have short term bonuses and odd rules.

Have a look here .

Savings | MoneySavingExpert

caffeinated_human

I’d personally keep a decent amount on saving accounts that are easy to access before thinking about anything longer term. An ISA can be useful, but it won’t help much if the money is locked away or hard to get to when you suddenly need it. In my opinion, the first step is probably a proper emergency fund, then look at the ISA options once you know what cash you can leave alone.

wmb194

https://forums.moneysavingexpert.com/discussion/comment/82061193#Comment_82061193

There are plenty of instant access Isas and these days many are 'flexible' meaning that withdrawals can be returned in the same tax year.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82061193#Comment_82061193

If you read my post - previous to yours. I explained that all types of savings accounts can be ISA's or non ISAs.

Only yesterday I withdrew £4K from an easy access ISA.