Isa

[Connemmara]

I had a £1,000 in an ISA account with Santander on line - now my friend told me about this advert 123 current account you would get more interest in putting into the current account. I then shifted the £1,000 back to current acount. Have I done the right thing since to my knowledge the ISAs are making little interest. Thanks for any replies

[Sipowicz]

You get 3% in the current account if you don't pay tax. Do you pay tax?

[Sipowicz]

Sorry, 3% on balances over £30,000.

[Connemmara]

I would say I would since I get a private pension from work and receive state pension - does that help

[SlackAlice]

At first glance you've lost your Tax free status on interest payments on the ISA.
You've got to keep £1000 minimum in the 123 a/c to qualify and the interest rates are staged.
£1000 to £1999 @ 1%
£2000 to £2999 @ 2%
£3000 upwards @ 3%

I have no idea of the rate in your ISA, what were you getting?

[Connemmara]

slack alice I have no idea - I am going down to Santander next week because I do have another £8,000 in an ISA account that I took out perhaps about 4 years ago - again this friend said I should have been looking at it every year and shop about to get a better rate say for example from Santander to Nationwide etc.

[gingejbee]

At current rates of interest, the difference between the two options isn't worth worrying about.

[furrypusscat]

Once taken out of an ISA you cannot put it back. Depends on what interest rate the ISA is. You don't pay tax on the interest on an ISA where as you do on an ordinary account. So you have to take that into consideration. Tax on savings interest on ordinary account is 20p in each pound you earn.

[Connemmara]

furry should I put the money from current account back into isa again. oh I don't know

[Sipowicz]

You can earn up to £9205 before you pay tax, if you don't pay tax I would say put the lot in the 123 account. The 3% is better than any current ISA!

[ubasses]

It is always good to review your interest rates every year. Use one of the comparison sites, then if you find a much better rate ask the new bank to transfer the funds over. Do not withdraw them yourself or you will lose the tax free status.

[furrypusscat]

Something you should consider when shopping around. Don't close the ISA, you transfer it thereby keeping the ISA interest free status. As said before, once closed that is it until the new tax year when you can then use the new tax years allowance.

[SlackAlice]

If you do decide to switch then make sure the one you pick will accept 'transfers in'. They (the new provider) will arrange the necessary paperwork so that you do not lose out on the taxfree bit.

Have a look at the comparison websites for an idea of the current deals, but be aware some of the better ones aren't on them. A little google sleauthing helps ☺

[Sipowicz]

Conne, all of this advice is useless unless you know if you pay tax or not. If you pay tax, stick to ISA's, if you don't stick to the 123 account.

[Connemmara]

Sipo I do think I pay tax from my private pension definitely now what

[Sipowicz]

ISA's! but look around for the best rates.

[Connemmara]

oh my god shall I put the current account money back to the isa - I left 84p in the isa to keep the account open.

[Sipowicz]

Look here,
http://www.moneysavingexpert.com/savings/best-cash-isa

[Sipowicz]

Conne, don't panic, the interest on £1000 isn't worth worrying about.

[furrypusscat]

Another thought. Compare the interest rates for easy access against the fixed rate Isa's. You tend to get a better rate to fix but 2 things to think about -
1. Will you need to get access to any of it quickly or can it be left. 2. I would never fix for more than 1 year as interests rates could go up, doubt they can go down much more so if you were to fix for 3 years and the rates did go up, you would lose out.

[Connemmara]

thanks Sipo - what will I do about the £8,000 lying for 4 years I think. sorry for all tooing and frooing