How you can get £555 more interest by moving your cash ISA
How To Get £555 More Interest By Moving Your Money Isa – Follow These Four Easy Steps
Savers could now receive more than 13 times more interest on their Individual Savings Account (ISA) simply by switching from a low-paying account to an over-paying account.
The gap between the worst and best cash Isas is so great that savers with £17,356 – the average amount of UK savers, according to the Building Societies Association – could earn an extra £555 simply by switching.
Many savers do not switch because they are afraid it will be difficult or time consuming. But it can be done quickly and easily if you follow our four steps.
Don’t Lose: The Gap Between the Worst and Best Money Isas Is So Wide That With £17,356, Savers Can Earn An Extra £555 Just By Switching
Easy transfer…
1. Search the best-buy charts to find a high-paying Isa that’s right for you. You can use our savings tables above, or visit our sister website at thisismoney.co.uk/isas. Make sure you find an account that accepts transfers from other providers – most do.
2. Ask the new provider for an Isa transfer form or find one on the website.
3. Complete the form. These are short and usually ask for your name, contact details, date of birth, social security number and information about your existing Isa.
4. Send the form to your new provider. He arranges the transfer. You do not need to contact your old provider for this. Don’t make the switch yourself by closing your existing account and creating a new one. If you do, you run the risk of losing the tax-free relief on your savings.
You can carry over credits from previous tax years to as many providers as you like.
However, you can only deposit new money in one Isa in one tax year. So if you’ve already deposited an Isa since the start of this tax year on April 6, you’ll need to either leave it or transfer the full amount to a new provider.
ISA providers have 15 days to complete the switch.
How much could I save?
If you haven’t moved your Isa savings for several months or years, you can probably get a rate many times higher than your current rate.
High Street banks have been very slow to pass on interest rate hikes from the Bank of England to their savings customers.
Some pay as little as 0.25 percent on their easily accessible money isas. Last week, Halifax and Lloyds Bank increased the rate they pay on their easily accessible money ISAS, but they still pay less than 1 percent to some depositors.
Lloyds Bank Cash Isa Saver pays 0.85 per cent on balances up to £24,999, while at Halifax the Isa Saver Variable rate is 0.9 per cent on balances up to £9,999. Building societies and newer banks generally offer much better rates.
Skipton BS, for example, has just launched an account available online or through its branches at 3.25 per cent. Last week, Shawbrook Bank raised its rate to 3.45 percent for those who like to open an account online.
Laura Suter, head of personal finance at stockbroker AJ Bell, says, “Too often money just sits in checking accounts or old savings accounts and pays little interest. It means that many big banks don’t have to raise their savings rates to attract more business, since they already have enough savings from the country anyway.’
Are regular bills better?
Until recently, regular savings accounts offered much better rates than cash Isas. But thanks to successive increases in key interest rates from the Bank of England, Cash Isas are back with a bang.
The difference between the most accessible account and the most accessible Isa was no less than 41 percent. Now that is only 5.8 percent.
Cash ISAs also benefit from tax exemption, so if you haven’t used up your ISA credit this year, it’s probably a better option than a regular savings account.
Justin Modray, of advisers Candid Financial Advice, says: ‘Cash Isa’s are making a comeback after years in the doldrums.’
sy.morris@dailymail.co.uk