Are Cash ISA's worth it right now?

Thanks for all the information all, and the arguments / discussions :p

One final question! I may take some of your earlier advice and look at other ISA providers, as I have found Tesco offering 2% on theirs. The only problem with it is that their T&C's stipulate the following:

If you would like to transfer your Tesco Bank Cash ISA to another Cash
ISA (including one of a different type offered by Tesco Bank) before the
end of your fixed rate term, we will charge you a fee equal to 30 days’
interest on the balance of your Account to do this. We will always contact
you to let you know if we are going to charge you a fee. If your Account
has matured, we will not charge you a fee for making a transfer.
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Am I right in thinking that this means if I save £1,000 (For the sake of an easier example) over the next 6 months (Until the end of the tax year), and then find a more attractive rate and wish to transfer elsewhere, as I transfer I will be paid 2% interest on the £1,000 I saved, but only for 6 months worth (So presumably £10), minus 1 month worth of interest (£1.60), effectively creating a new ISA (With an increased allowance) with the new provider, containing £1,008.40? Or will the interest still be paid at the end of the ISA's year, rather than the tax year, even though it's been transferred?

Thanks :)!
 
rossk26 said:
Is that after tax, fees and bad debts?
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After fees and bad debts yes.

Moses said:
It's not just about the right now, though, is it? They may not be the best in terms of raw numbers right now, but if the block of money of money in the tax free wrapper sizeable, and can rise by ~£6k a year, then it's very good for the future... when/if rates rise.

Eg. if someone has £30k in an ISA, do they really want to rip it out and give it to someone on Zopa, considering it'd take them five years to put that money back in an ISA? It's not as clear cut a decision as you paint it, imo.
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You can put over £10k in a S&S ISA per year. However it's besides the point because the difference in interest rates is always more than the 20% basic tax rate anyway.
 
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Energize said:
After fees and bad debts yes.
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That's pretty decent then! After this financial year I'll have an overflow of collective regular savings that need to be put somewhere, and I've maxed my ISA. Was initially just going to set up a current account which paid interest on balance (Santander 123 @ 3%).

How much have you invested? And what have you made (after all fees, tax, and bad debts)? And also timescale too.

I tend to look no further than 12months with my savings, so couldn't tie it down to 3-5 years.
 
What is the best way of saving at the moment? Currently I just put in some money into a saving account each month via direct debit, but I don't exactly get much interest. I have 7 grand in there and get £1.something a month interest so it's pretty poo. What would be the best option for me?
 
Not really, but then it beats having it in a current account.

I use ISA's because I literally have nothing else to do with it at the moment. I've considered investing in stocks but don't feel comfortable in it yet.
 
Neoni said:
Not when you put 10-30k in it isnt..
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Yes, it is.

its a risk but the return could be anything from £1 a month upto what 1mil...
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You must appraise it by looking at the average return. Which is pittiful. Because it's a stupid product.

have a friend who has 30k in premium bonds wins around £100-200 a month.
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It's always 'a friend' with Premium Bond anecdotes isn't it?

The bank even advised me not to invest into anymore isa's as the rate of return is so poor.
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'The bank' or 'Somebody behind a counter in a bank'? The point in an ISA right now isn't the rate of return, which is poor, it's the tax free wrapper.
 
I've considered premium bonds on a couple of occasions as a friend at work has £15k in them and thinks they're worth it. However when I weighed up what his "worth it" actually meant, it's nothing more than getting a £25 cheque every few months, maybe a couple of months in a row if he's lucky. The fact he gets a cheque makes him think he's winning something good and some month he could get a bigger win.
There's nothing to say he won't and in all fairness it's money he has spare but I certainly wouldn't be pulling out a couple of years worth of ISA savings to stick in them.

I genuinely find it hard to believe the friend of of one of the posters above was getting £100+ every month. Phone them up and ask them for the lottery numbers and hope they aren't pulling your leg as they are ridiculously lucky.
 
Moses said:
Relevance? We're talking about savings products, essentially. S&S are another league.
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Because some investment products in S&S ISA's are practically the same as a cash ISA.

And that ignores the safety which products offered by banks offer, and the addition value that offers - eg. you could have £85k in an ISA and be safe if the bank fails/your financial security is guaranteed by the state... but if Zopa fails there isn't the same safety net.
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With Zopa your money is lent out to people, if Zopa goes bust your money isn't lost like it would be if a bank went bust (ignoring the FSCS scheme).
rossk26 said:
That's pretty decent then! After this financial year I'll have an overflow of collective regular savings that need to be put somewhere, and I've maxed my ISA. Was initially just going to set up a current account which paid interest on balance (Santander 123 @ 3%).

How much have you invested? And what have you made (after all fees, tax, and bad debts)? And also timescale too.

I tend to look no further than 12months with my savings, so couldn't tie it down to 3-5 years.
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I've only got about £500 in Zopa, made 5.3% AER over the past 6 months, no bad debt so far.
 
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I'm looking at keeping a small amount in my ISA but putting half into some S&S ISAs.

Had enough of the pitiful return, which is nothing more than a couple of nights out.

Need some risk and excitment in my life :D:p
 
i see premium bonds as just gambling with your interest

all mine goes into shares, havent seen any ISAs worth anything recently
 
rossk26 said:
I've got 3% on my 2013/14 ISA, you just need to shop around.

Depends how much you've got? You're not going to make that much money in 6 months with any savings account really.
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My ISA I can withdraw my money at any time which is why the interest rate isn't great, if I locked it in for 3-5 years I could have got another 2% on top of what I got 4 years ago when I opened it.

The reason I get the rate I do is because I've got over £15k in there to get their "better rate" but it's still pretty poor.

MW
 
I have an ISA at 1.95% but I can get at my money when I want. I put money in every month religiously.

Personally id rather over pay my mortgage at the moment.
 
Energize said:
ISA's aren't worth it right now as the banks are offering rip-off interest rates.

Zopa on the other hand averages returns of 5.1%.
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Those are gross rates, not net.

Peer to peer lending is in consultation now about how to regulate it and also in consultation about whether or not it is suitable for an ISA tax wrapper. It currently is not suitable for a pension tax wrapper, despite a couple of pension providers offering it.
 
The_Abyss said:
Those are gross rates, not net.

Peer to peer lending is in consultation now about how to regulate it and also in consultation about whether or not it is suitable for an ISA tax wrapper. It currently is not suitable for a pension tax wrapper, despite a couple of pension providers offering it.
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I realise it's gross, I and many other people receive interest payments gross and quoting that rate is the only way to compare it to other investments. Even the net rate is still considerably better than an ISA though, the 5.3% I made would be 4.24% net.
 
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