What to do with my ISA?

LauraThornett
LauraThornett Posts: 7 Forumite
First Anniversary First Post Combo Breaker
in ISAs & tax-free savings
Hello,

So I have a Cash ISA with Natwest that I opened years ago and the interest rate is appalling on it now. I want to move to a normal savings account as I don't really benefit from the ISA as I never save more that £2000 a year.I want a better return basically! What would the implications be if I moved my savings out of the ISA into another account and closed the ISA?

Also, I opened a young savers account with Natwest 9 years ago. Its is held in trust for my son. I pay in to it monthly but again, the interest rates are poor! Are there implications for closing this down too as it is not my account?

Comments

  • masonic
    masonic Posts: 23,245 Forumite
    Photogenic Name Dropper First Post First Anniversary
    edited 15 September 2018 at 1:08PM
    For the ISA, the only implication is that if you started saving more than £20k per tax year or have a very large amount of savings, it would take you longer to get it all sheltered from tax if circumstances changed. Generally when you have multiple tens of thousands of pounds in savings that you are going to keep for the long term, keeping it all in cash is not advisable. At the lower end of the income/savings scale, cash ISAs no longer make much sense. Up to £1000 of interest can be earned tax free outside of an ISA for basic rate taxpayers, more for very low earners.

    For the trust account, presuming it's his legally his money, and you are a trustee, then you have the right to move it if it would be in his interest to do so, but would need to ensure he remained the beneficial owner of the new account.
  • Albermarle
    Albermarle Posts: 22,042 Forumite
    First Anniversary First Post Name Dropper
    Unless you have very large cash savings earning interest ( say > £50K ) , there is no need normally to use the tax shelter of an ISA anymore.
    I was reading this morning that non ISA savings accounts typically offer interest rates of 0.3% higher than equivalent isa accounts .
    Apart from that Nat West/high street bank savings accounts typically pay poor interest for Isa's and non Isa's. You should go to the website 'MoneySupermarket.com ' and go to the savings section and you can search for the accounts giving the best interest rates. You will get better rates if you tie the money up for a period compared to easy access accounts.
  • jimjames
    jimjames Posts: 17,596 Forumite
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    You haven't said how much is in the account but for amounts of up to around £10k you can get between 3% and 5% which is way more than any cash ISA by using current accounts and regular savers
    Remember the saying: if it looks too good to be true it almost certainly is.
  • xylophone
    xylophone Posts: 44,345 Forumite
    Name Dropper First Anniversary First Post
    Was your son born between September 2002 and 2 Jan 2011?
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