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  • FIRST POST
    • s_ridley84
    • By s_ridley84 7th Mar 18, 10:58 AM
    • 3Posts
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    s_ridley84
    Cash ISA suggestions?
    • #1
    • 7th Mar 18, 10:58 AM
    Cash ISA suggestions? 7th Mar 18 at 10:58 AM
    Hello fellow forum members,

    I hope I am following protocol when asking for this advice (I'm a newbie - be gentle)
    The information out there is quite overwhelming, but I wonder if anyone would be kind enough to give an opinion on what I should do with some money I have saved. Unfortunately, giving it to you is not an option (nice try!) - I'm thinking of a fixed 1/2 year cash ISA, and my main thought is when to open that account. Here's the gist:

    - I'll have 3600 in April
    - 6000 in May
    These are savings from regular savings accounts and not ISAs (so not concerned with an ISA transfer).

    Would it be advisable to open a cash ISA before end of April 2018 (looking at one that has a nominal opening balance requirement), with the ability to make subsequent deposits of the above amounts? OR shall I just wait until the combined funds are available (around May/June) and then open a cash ISA account with that total amount?

    Thank you in advance for any advice/guidance offered
    Sian
Page 1
    • MallyGirl
    • By MallyGirl 7th Mar 18, 11:06 AM
    • 2,685 Posts
    • 7,687 Thanks
    MallyGirl
    • #2
    • 7th Mar 18, 11:06 AM
    • #2
    • 7th Mar 18, 11:06 AM
    why do you want a cash ISA - the rates are pretty dire?
    • Riff Raff
    • By Riff Raff 7th Mar 18, 11:09 AM
    • 18 Posts
    • 12 Thanks
    Riff Raff
    • #3
    • 7th Mar 18, 11:09 AM
    • #3
    • 7th Mar 18, 11:09 AM
    The ISA allowance this year is 20,000 so unless you're expecting a load more cash in the near future, the timing doesn't really matter to you.
    • s_ridley84
    • By s_ridley84 7th Mar 18, 11:16 AM
    • 3 Posts
    • 1 Thanks
    s_ridley84
    • #4
    • 7th Mar 18, 11:16 AM
    • #4
    • 7th Mar 18, 11:16 AM
    This is true - I'm a higher rate tax payer so thought this has a bearing on choosing ISA over savings accounts?
    • tripled
    • By tripled 7th Mar 18, 11:19 AM
    • 2,453 Posts
    • 1,109 Thanks
    tripled
    • #5
    • 7th Mar 18, 11:19 AM
    • #5
    • 7th Mar 18, 11:19 AM
    As a higher rate tax payer the first 500 of savings interest per year is tax free.
    • ValiantSon
    • By ValiantSon 7th Mar 18, 11:42 AM
    • 1,867 Posts
    • 1,725 Thanks
    ValiantSon
    • #6
    • 7th Mar 18, 11:42 AM
    • #6
    • 7th Mar 18, 11:42 AM
    If these are all your savings then you won't pay any tax on the interest.

    Even if you do earn interest above 500 you may still find keeping the money in a non-ISA account is better. You'll need to do the sums, but the best one year savings bond at the moment is paying 1.9%, whereas the best cash ISA is paying 1.46, so you are still likely to be better off with a non-ISA account.
    • Paul_DNAP
    • By Paul_DNAP 7th Mar 18, 12:32 PM
    • 66 Posts
    • 80 Thanks
    Paul_DNAP
    • #7
    • 7th Mar 18, 12:32 PM
    • #7
    • 7th Mar 18, 12:32 PM
    It is difficult to answer with any certainty as it will come down to the T&C of the individual product or provider you choose to open your ISA with, in particular for fixed term deals.


    So what I'd do would be to choose the best rate fixed ISA out there (I am sure there is a handy website somewhere that lists these!) and then go directly to them and ask the question "If I open this now can I add more funds in May?" - the answer to that answers your OP question.


    As has been said, being a higher rate tax payer only comes into bearing if you're earning more than 500 income from savings interest a year, as you'll pay income tax on anything over 500. If you're nowhere near that level then you probably don't need the tax-free wrapper yet, so just pimp it out for the best rate for the fixed term you want. Unless of course you're planning on building your savings up in leaps and bounds to a decent amount, in which case having some in ISAs will help delay the day when you start tickling the threshold, but then you could always just wait start moving funds over when you come nearer to that. (e.g. 25k earning 2% would put you at the 500, so when you get to that you could shift 20k into ISA using up one year's allowance alone.)


    Of course you don't need to put both funds into the same place, you could mature one into an ISA and one into a fixed rate saver or a high interest current account.
    • s_ridley84
    • By s_ridley84 7th Mar 18, 1:05 PM
    • 3 Posts
    • 1 Thanks
    s_ridley84
    • #8
    • 7th Mar 18, 1:05 PM
    • #8
    • 7th Mar 18, 1:05 PM
    Thank you to everyone. This has been really helpful indeed. I'll start looking at my options now
    • jimjames
    • By jimjames 7th Mar 18, 1:11 PM
    • 12,585 Posts
    • 11,230 Thanks
    jimjames
    • #9
    • 7th Mar 18, 1:11 PM
    • #9
    • 7th Mar 18, 1:11 PM
    Cash ISA suggestions? - don't get one!

    I've got more savings than the numbers mentioned and none of it is in a cash ISA. I'm getting a rate that averages around 4.5% fully FSCS protected outside a cash ISA
    Remember the saying: if it looks too good to be true it almost certainly is.
    • Audaxer
    • By Audaxer 7th Mar 18, 5:22 PM
    • 1,042 Posts
    • 602 Thanks
    Audaxer
    Cash ISA suggestions? - don't get one!

    I've got more savings than the numbers mentioned and none of it is in a cash ISA. I'm getting a rate that averages around 4.5% fully FSCS protected outside a cash ISA
    Originally posted by jimjames
    That's a very impressive average interest rate. I know Nationwide Flex Direct pays 5% on 2,500 for each account, but I didn't think anywhere near that sort of average interest was possible for significant cash balances. I'd be interested to know the maximum you can have in cash savings that will give you average interest of 4.5%.
    • dqnet
    • By dqnet 7th Mar 18, 7:52 PM
    • 213 Posts
    • 68 Thanks
    dqnet
    That's a very impressive average interest rate. I know Nationwide Flex Direct pays 5% on 2,500 for each account, but I didn't think anywhere near that sort of average interest was possible for significant cash balances. I'd be interested to know the maximum you can have in cash savings that will give you average interest of 4.5%.
    Originally posted by Audaxer
    Me too..!
    • jimjames
    • By jimjames 7th Mar 18, 8:31 PM
    • 12,585 Posts
    • 11,230 Thanks
    jimjames
    That's a very impressive average interest rate. I know Nationwide Flex Direct pays 5% on 2,500 for each account, but I didn't think anywhere near that sort of average interest was possible for significant cash balances. I'd be interested to know the maximum you can have in cash savings that will give you average interest of 4.5%.
    Originally posted by Audaxer
    Just checked and you should be able to achieve it on 12k to around 28k but it will decrease as the balance rises.

    I'm currently running at around 4.8%
    Remember the saying: if it looks too good to be true it almost certainly is.
    • RG2015
    • By RG2015 7th Mar 18, 8:51 PM
    • 1,219 Posts
    • 710 Thanks
    RG2015
    Just checked and you should be able to achieve it on 12k to around 28k but it will decrease as the balance rises.

    I'm currently running at around 4.8%
    Originally posted by jimjames
    The link below shows how this may be achieved.

    However, by their calculations 12k gives 4.3% and 28k gives 3.5%

    https://www.bankaccountsavings.co.uk/
    Last edited by RG2015; 07-03-2018 at 8:55 PM.
    • jimjames
    • By jimjames 7th Mar 18, 9:02 PM
    • 12,585 Posts
    • 11,230 Thanks
    jimjames
    The link below shows how this may be achieved.

    However, by their calculations 12k gives 4.3% and 28k gives 3.5%

    https://www.bankaccountsavings.co.uk/
    Originally posted by RG2015
    Useful tool but quite simplistic. It doesn't show movement from current account to reg saver which will increase the average rate hence the higher number I get
    Last edited by jimjames; 07-03-2018 at 9:15 PM.
    Remember the saying: if it looks too good to be true it almost certainly is.
    • RG2015
    • By RG2015 7th Mar 18, 9:10 PM
    • 1,219 Posts
    • 710 Thanks
    RG2015
    Useful tool but quite simplistic. It doesn't show movement from current account to reg saver which will increase the average rate
    Originally posted by jimjames
    Yes it is basic but it demonstrates the possibilities.
    • jimjames
    • By jimjames 7th Mar 18, 9:15 PM
    • 12,585 Posts
    • 11,230 Thanks
    jimjames
    Yes it is basic but it demonstrates the possibilities.
    Originally posted by RG2015
    Definitely. I was just explaining why their numbers are lower than mine
    Remember the saying: if it looks too good to be true it almost certainly is.
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