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Joined: 23 May 2006
Posts: 13510

PostPosted: Thu Mar 06, 14 4:57 pm    Post subject: Reply with quote

I'll get my financial advisor AKA the Mrs to have a look at this post.

Rob R wrote:
Martin Lewis has just sent me this;

It's the final ISA countdown - de-de dur-dur...
Warning: Use it or lose it. Only ONE MONTH left to take advantage of this year's tax-free savings allowance

Don't get scared off cash ISAs - they're not complex, they're just savings accounts where you don't pay tax on the interest. You can put 5,760 per tax year in, and after that the money stays tax-free year after year. So if you've not saved any cash in one since 6 Apr 2013, and have savings, consider using yours ASAP. Full info in Top Cash ISAs, here are the best buys...

Get 1.75% AER variable with the ability to take money out. Many wrongly believe you need to lock money away in a cash ISA. National Counties (min 100) pays 1.65% & allows unlimited withdrawals. Britannia's a higher 1.75% (min 500) but only allows 2 withdrawals a year; though you can transfer in past years' ISAs to up their rates.
Lock cash away to earn up to 2.75% AER. If you don't need to access the cash, Top Fixed Cash ISAs pay more. Though beware locking in, in case other rates bounce back. Top 1 & 2-yr fix: Britannia 1.85% and 2.05% (2% and 2.2% for existing custs). 3 yr: Coventry BS 2.75% (no transfers).
Should I use a 3% AER easy access savings instead of an 1.75% ISA? If you're willing to switch to Santander's 123 bank account (2nd top for service in our poll), it pays 3% if you've 3,000-20,000 in it. Does this beat an ISA? Often, yes. It pays 2.4% after basic rate tax, 1.8% after higher rate. Yet by putting cash in an ISA you protect it from tax year after year. So balance higher rates now versus building up a bigger tax-free savings pot each year.
Does your local credit union offer up to 3% AER? A few of these local non-profit savings and loan co-ops offer higher rate cash ISAs, eg, Voyager Alliance (open to those working in transport) pays 3%. See Credit Unions guide.
Cash ISA golden rules. 1) Monitor your rate. If it drops, ditch & ISA transfer. 2) You can use your ISA allowance for share investing too - see the ISA Guide for more. 3) ) All accounts listed have full 85k savings safety.

Rob R

Joined: 28 Oct 2004
Posts: 31902
Location: York
PostPosted: Wed Mar 12, 14 10:38 am    Post subject: Reply with quote

Martin Lewis has just sent me this;

Quick. 2.9% AER cash ISA loophole
Take advantage of two cash ISAs that you're meant to lock cash away in, but let you escape if needed

A cash ISA is just a tax-free savings account. If you've not opened one since last April, you've until 5 April to save up to 5,760 so the taxman can't bite your interest. Most ISA rates aren't great, but we've spotted two fixed cash ISAs with manipulatable terms. Warning: Go quick. Last time we found a trick like this, it was pulled hours after we put it in the email.

The 2.9% AER cash ISA. Newcastle BS's 5-year 2.9% fixed rate ISA (min 500) accepts new money and transfers. Like all fixes it's designed for locking cash away, but 5yrs is a long time to do that, especially as interest rates may bounce back.

By law, technically even fixed-rate cash ISAs must allow you to access the cash, so instead they levy hefty interest penalties. Yet with a penalty of just 120 days' interest, Newcastle's is low for a long fix & it allows partial withdrawals (the penalty's only on what you withdraw). So the trick is to get this, even if you may need to access your cash much earlier.

If you withdraw after just a year, after the penalty you'd have got an avg rate of 1.95%, compared to 1.75% easy access, or 1.9% in the top 1-yr fix. Withdraw after 2 yrs and it's 2.4%, compared to 2.05% in the top 2-yr fix. If Newcastle's pulled, Coventry BS 2.75% 3yr fix (new money only) also has just 120-day penalties, though you need to close it to withdraw.
1.65% AER variable with unlimited access to cash. If you'll need to dip into your ISA regularly, National Counties' Online Cash ISA allows unlimited withdrawals, paying 1.65% AER. Slightly boost this with Britannia's Select Access ISA, paying 1.75% AER if you don't withdraw cash more than twice a year (0.25% if you do).
Does Santander 123's 3% beat the best easy-access cash ISAs? Read Martin's new Santander v ISAs blog.
Cash ISA golden rules. 1) Monitor your rate on variable deals. If it drops, ditch & ISA transfer. 2) NEVER withdraw cash to transfer. Ask the new provider to shift it for you. 3) All accounts listed have full 85k Savings Safety.

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