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Is this the right place for a serious question?

Community Veteran
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Registered: 30-08-2007

Is this the right place for a serious question?

One for the financial wizards...
A couple of my bank accounts include an ISA and a Savings account with the same bank. It happens I transfer the same amount each month into both accounts. I am considering rationalising this to one account, closing one and doubling the amount paid into the survivor.
Which should I close, the ISA or the Savings account? 
Experience; is something you gain, just after you needed it most.

When faced with two choices, simply toss a coin. It works not because it settles the question for you. But because in that brief moment while the coin is in the air. You suddenly know what you are hoping for.
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Re: Is this the right place for a serious question?

Assuming that the interest rates are equal and you pay income tax on your savings then the ISA would be more beneficial.
Even if the rates aren't the same, but close after the tax, and you're looking long term then the ISA should still be more beneficial, I would also look into switching.
I move my ISA every year to the best account, sadly these days still not very good though.
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Posts: 7,153
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Re: Is this the right place for a serious question?

Thank you dvorak, I shall bear your comments in mind.
Experience; is something you gain, just after you needed it most.

When faced with two choices, simply toss a coin. It works not because it settles the question for you. But because in that brief moment while the coin is in the air. You suddenly know what you are hoping for.
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Re: Is this the right place for a serious question?

Once an ISA is closed you can't recover it so would lose the inherited tax free allowance.
If, however the amount is less than one year's allowance and you don't intend to start another one it may well be better to get the best interest rate you can - after tax is taken into account
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Re: Is this the right place for a serious question?

On an ISA, it is not just the interest that is tax free, in subsequent years, the interest on the interest is also tax free.
Quote from: dvorak
I move my ISA every year to the best account, sadly these days still not very good though.

I ladder my cash ISAs (Long term x highest interest rates).
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Re: Is this the right place for a serious question?

There is a maximum amount that can be invested in an ISA. For the 2012/13 tax year details are:
Quote
Following the publication today of inflation figures for September by the Office for National Statistics (ONS), HM Treasury has announced that subscription limits for Individual Savings Accounts (ISAs) from April 2012 will increase to £11,280 (up to half of which can be saved in cash).