NISA vs Current

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RenesisEvo

Original Poster:

3,615 posts

220 months

Thursday 18th September 2014
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Going round in circles on this one so I thought I'd ask the PH wisemen. My ISA rate is about to drop to nearly nothing, so it's time for the annual shop around. Once again there's a pitiful offering to house my savings - 1.5% at best without locking it away - and interest rates aren't likely to go down so I'm not keen to trap it away. I'm weighing up keeping the (N)ISA going, versus bunging the lot into a Santander 1-2-3 account, where even the £2 monthly fee and loss of tax-free gains is outweighed by the additional interest I would earn.

It seems like the most profitable place to stick my cash short of investments, but do you agree? I can't find enough information to make me confident about trackers or other medium-term options; I'm saving for property (not as investment per se); another reason not to go for longer term fixed rates. No debt to pay off other than a student loan; I want to be able to pay in regularly.

What happens if I do leave the ISA, is it simply a case of losing potential tax-free interest (which seems academic if the earnings are lower), or are there any more shortcomings I've overlooked, any longer term tax implications? I'm also concerned about the safety of having savings and cash in one pot, accessible via one card, one account number, although getting a 1-2-3 credit card may help mitigate that a little.

Has anyone done similar? How did it work out for you?

TIA

RenesisEvo

Original Poster:

3,615 posts

220 months

Friday 19th September 2014
quotequote all
Jon1967x said:
The Santander current account interest is stepped and capped to 20k
I'll get the highest rate; it's likely I will exceed the cap at some point, anything above that can then go into an ISA.