What ISA to go with?

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mylifeisover999
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I'm with Barclays at the moment but it appears they will only pay 1.48% from April of this year on balances above 15k (which is pretty poor).

The best option from what I can see is the santander 123 account which pays 3%, and with that account you can also get 2.3% on their ISA. So for about 20-25k I'm thinking this Santander double is my best bet.

Any alternatives?
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moutonfou
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I'm going from an ISA to Santander too. The benefit of an ISA is meant to be that the interest is tax free. So if the difference between the ISA and the Santander rate was only minimal you would go with the ISA as you would get to keep all of the interest. But the difference is so massive that even with tax you will still be miles better off with Santander. I don't know if you pay bills etc but you also get cashback on those. Remember that you will need to basically use the Santander account as your main account however - there is a minimum amount you need to pay in each month and you need to have a direct debit set up to stay 123 eligible.
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mylifeisover999
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(Original post by moutonfou)
I'm going from an ISA to Santander too. The benefit of an ISA is meant to be that the interest is tax free. So if the difference between the ISA and the Santander rate was only minimal you would go with the ISA as you would get to keep all of the interest. But the difference is so massive that even with tax you will still be miles better off with Santander. I don't know if you pay bills etc but you also get cashback on those. Remember that you will need to basically use the Santander account as your main account however - there is a minimum amount you need to pay in each month and you need to have a direct debit set up to stay 123 eligible.
Ye that's how I was thinking. I don't see anything that is close to the 123 account. As mentioned the barclays ISA is 1.48 compared to the 123 which is 3%

You say you need to use it as your main account but how would you define that specifically? Someone else said that to me. As far as I'm aware so long as you have 2 direct debits + £500 put in per month then you qualify for the 3%. I plan to just fulfill those 2 terms and not use thecard whatosever, therefore in essence treating it as an ISA.
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moutonfou
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(Original post by mylifeisover999)
You say you need to use it as your main account but how would you define that specifically? Someone else said that to me. As far as I'm aware so long as you have 2 direct debits + £500 put in per month then you qualify for the 3%. I plan to just fulfill those 2 terms and not use thecard whatosever, therefore in essence treating it as an ISA.
Yeah I think that's basically the only terms. But as my current account is doing absolutely nothing for me at the moment, I'm just going to switch. As a warning if you want to open it as a second account you might need to go into branch and ask how, as when I filled out the online application it was for a switching application which basically closes down my old account when it goes through, and as I remember there wasn't a "please don't close down my other account" option anywhere. But maybe somebody else will put me right on that!
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itsn0b0dy
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Shares and Stocks ISA

don't go for a cash isa whyyyy
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meenu89
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(Original post by mylifeisover999)
I'm with Barclays at the moment but it appears they will only pay 1.48% from April of this year on balances above 15k (which is pretty poor).

The best option from what I can see is the santander 123 account which pays 3%, and with that account you can also get 2.3% on their ISA. So for about 20-25k I'm thinking this Santander double is my best bet.

Any alternatives?
http://www.moneysupermarket.com/investments/isas/
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DeeDub
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(Original post by moutonfou)
I'm going from an ISA to Santander too. The benefit of an ISA is meant to be that the interest is tax free. So if the difference between the ISA and the Santander rate was only minimal you would go with the ISA as you would get to keep all of the interest. But the difference is so massive that even with tax you will still be miles better off with Santander.
Although I agree with this to a certain extent it was worth bearing in mind two things.

  1. If you don't use your ISA allowance for a given tax year you lose it forever.
  2. Savings outside an ISA are not just taxed this year but every subsequent year unless you move it across using up future allowance.


If the OP has their money already within the ISA I believe it would be unwise to move it out in order to get 0.9% for one year (assuming basic rate taxpayer).
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moutonfou
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(Original post by DeeDub)
Although I agree with this to a certain extent it was worth bearing in mind two things.

  1. If you don't use your ISA allowance for a given tax year you lose it forever.
  2. Savings outside an ISA are not just taxed this year but every subsequent year unless you move it across using up future allowance.


If the OP has their money already within the ISA I believe it would be unwise to move it out in order to get 0.9% for one year (assuming basic rate taxpayer).
True... I am going off my own savings which are below the ISA threshold so I can move them around and know I can just pop them back in the next year if it doesn't work out. But OP you should bear in mind the interest rate as it stands can only go up... so you could wake up one day and find that the rate has gone up, all the banks are putting their ISA's back up to 3%+ and you can't get your 25,000 back in as DeeDub says.
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mylifeisover999
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I don't really get ISA's tbh. I find it confusing. There's the yearly allowance, then there's the 15k allowance recently introduced, then there's cash ISA's and stocks and shares ISA's. Every time I read up on it I get confused.
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Tokyoround
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(Original post by mylifeisover999)
I don't really get ISA's tbh. I find it confusing. There's the yearly allowance, then there's the 15k allowance recently introduced, then there's cash ISA's and stocks and shares ISA's. Every time I read up on it I get confused.
The new change just increased the allowance to 15k and also allowed for all types of ISA to be treated the same. Forget about what you knew before and just focus on the new ISA system. Your 15k allowance can be used for any combination of cash ISAs and stocks & shares ISAs. Stocks ISAs generally provide a better return if you know what you're doing and are willing to invest for around 5 years, you pay no capital gains tax, no tax on bond coupons and 10% on dividend income from shares, only really a benefit if you are a higher rate taxpayer.
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balotelli12
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Max out cash ISAs now
Build up as much as possible year on year
Because one day interests will rise
And one day you may be a high rate tax payer
You will then enjoy tax free returns from your ISAs
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Runninground
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(Original post by mylifeisover999)
I'm with Barclays at the moment but it appears they will only pay 1.48% from April of this year on balances above 15k (which is pretty poor).

The best option from what I can see is the santander 123 account which pays 3%, and with that account you can also get 2.3% on their ISA. So for about 20-25k I'm thinking this Santander double is my best bet.

Any alternatives?
The ISA will change to a NISA from July, which simply means you can invest up to £15k in either stocks and shares or cash (or both). Any interest you earn will not be taxed. I'm not sure what you mean about balances over 15k as the ISA limit is currently 11k something and will increase to 15k in July (so you can't invest over 15k).

So if you have 20-25k to invest you can't put it all in an ISA/NISA in one year. Your best bet is to put it into a Stock and Shares ISA before the end of this tax year and use up the full allowance. You can put it in a cash isa if you want but it depends on your attitude to risk. This will leave you with the remainder (20-25k less 11k something that you put in this years ISA) to go in an ISA or NISA in the next tax year, which is only a few days away. By doing this you are making full use of your 13/14 allowance and leaving some space in your 14/15 ISA for any further investments that you make.

This is just my opinion and I am no expert, but I am currently playing around with some ISAs and wondering what to do too!
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starlass
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If you're looking for rates, the best place to go at the moment is TSB for there Classic Plus account. It's not an ISA but works very much in the same way as Santanders 123 account - except you are getting 5% on it.

Even with tax taken off it, the amount of interest you'll be getting is a lot higher than any ISA on the market at the moment.
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Hedgeman49
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(Original post by starlass)
If you're looking for rates, the best place to go at the moment is TSB for there Classic Plus account. It's not an ISA but works very much in the same way as Santanders 123 account - except you are getting 5% on it.

Even with tax taken off it, the amount of interest you'll be getting is a lot higher than any ISA on the market at the moment.
That TSB account only pays interest on balances up to £2,000
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mylifeisover999
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(Original post by Hedgeman49)
That TSB account only pays interest on balances up to £2,000
I suppose you could have one ISA account with them with £2,000 in it and then another ISA. Or no?

And also I'm wondering why I'm receiving 2.10% on my ISA for the last year and now barclays are doing 1.49%. Why has it gone down?
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Hedgeman49
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(Original post by mylifeisover999)
I suppose you could have one ISA account with them with £2,000 in it and then another ISA. Or no?

And also I'm wondering why I'm receiving 2.10% on my ISA for the last year and now barclays are doing 1.49%. Why has it gone down?
That account isn't an ISA. You could open that account and then open an ISA if you want. You can only open one cash and one stocks ISA in a year (soon to be just one ISA when they merge in July).

The T&Cs of your ISA will have said that you had 2.1% for a year, then they would reserve the right to change it. A lot of ISAs use attractive rates to lure people to buy then slash after a year. You're actually quite lucky to get 1.5%, they often cut them to 0.5%. Of course at that point you transfer to another ISA or withdraw your cash.
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suedonim
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The other advantage of ISAs for students is that the interet doesn't count as income for student finance. You should declare interest on taxable accounts and it may affect your finance. Declaring my 10 pounds of interest was a lot of fuss, although that might have been a Student Finance screw up.
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Key123
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(Original post by balotelli12)
Max out cash ISAs now
Build up as much as possible year on year
Because one day interests will rise
And one day you may be a high rate tax payer
You will then enjoy tax free returns from your ISAs
Not the best move if you plan on depleting your savings in the next 3-5 years eg on a house deposit.

Lose out on interest now and won't hold the money in the tax shelter long enough to make a gain.


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