So you don’t gain any tangible benefit from doing that, but you are essentially making it work so that if your ISA ever had an incredible % rate - you could dump your £20k plus your £10k movement money into it without having any problems?
If you mean benefit relative to just keeping it constantly in a non-ISA savings account, then no I don’t gain any current benefit. But I’m not losing out in a significant way either.
Yes. If cash ISA interest rates went above non-ISA cash interest rates in the future I could move the £10k back into my cash ISA without using any of my subscription allowance for the year in which that happened.
But cash ISA interest rates going above non-ISA cash interest rates is not the only scenario in which I might want to do this. The other scenario would be the removal or lowering of the personal savings allowance or me moving into a higher tax bracket.
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Yes. If cash ISA interest rates went above non-ISA cash interest rates in the future I could move the £10k into an ISA without using any of my subscription allowance for the year in which that happened.
I am not qualified to offer tax advice but I think this would reduce your allowance.
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Not if following the process I have described above (money moved out and back in a flexible ISA within same tax year).
okay gotcha, I was trying to work out the benefits and just got stumped 
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Interesting! How is ISA interest calculated on this constantly moving around £10K?
Simple example. Let’s say the £10k is in Marcus for 360 days and in a 1% ISA for 5 days.
- Marcus interest will be something like £10k x 0.015 x 360/365 = £148. This is taxable but below PSA so no tax to pay.
- ISA interest will be something like £10k x 0.01 x 5/365 = £1.37
I would actually earn more than this in interest as I would use a collection of higher interest accounts than Marcus. But the example keeps things simple.
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…and…you get to keep your ISA tax free allowance for that year rather than losing the benefit allowance because you haven’t used it that year , which as you say if ISA interest rates alter could be advantageous or you can invest in later years in a Stocks and shares ISA up to that amount for a tax free CGT benefit, and in later years if you become a higher rate taxpayer even better - you do need it to be a flexible ISA initially as you’ve already said for this to work
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Looks like you’ve cracked it for ISAs and the like but I guess this only really works or is advantageous if you have a little war chest ready to capitalise on the possible PSA decrease or ISA interest rate increase (i dont see interest rates going up) so would be in the PSA part.
I’ve got everything sealed up in ISAs or Bonds atm so this strategy wouldnt help me as yet, but i can see why it could!
I assume here you mean some form of investment ISA like Stocks and Shares.
The only thing I would say here is I personally think building up and maintaining an easy access cash savings balance (large enough to cover bills and other regular expenses for a few months in the event of unexpected unemployment) should be prioritized before tying up money in investments.
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Rainy Day fund. 3 months at first, 6 months long term goal. There’s even an umbrella in the baked in Monzo images!
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Yes I have a S&S LISA for my house deposit and now have a S&S ISA with the Dozens Bonds (which will effectively work as my “rainy day”).
I’ve got some money which I have which just sits in a Current Account which is kinda like my emergency fund.
Although my recent deposit for my next flat wiped that clean.
I’m only just starting to build up my portfolio of savings having just graduated university.
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Anyone seen Coventry BS in the financial news? Just added a new offer that Monzo should be doing.
1.5% Flexible online Easy Access
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Might be worth mentioning there are also several others pretty close to 1.5%
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All signed up but are there any ideas on timings or possible rates and if this will happen for 2018-19 as other institutions have deadlines earlier than end of the month to open 2018-19 ISAS ? and for some offers may need to make a decision as early as next week !
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Yep, Buckinghamshire BS appear to be bucking the trend - I’ll get my car keys…
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Is this just for the 2018 - 2019 years allowance or can you join the waiting list for the next tax year 2019 - 2020
See I would happily take 1% and a easier life with Monzo (one log in one view) then the marginally better rate with Marcus, (or ING Direct 2.0 as I think of it), also makes money moving simple.
I don’t really have the time between work, school pick ups and activities to manage loads of accounts.
Would also be super interested in a stocks and shares option, Moneybox is great, but again, one place for all
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I’m not sure I’d be for this.
Monzo shouldn’t, in my opinion, be partnering up with a ‘middle man’ for an S&S ISA. The more pockets you line before you get to the actual fund fee the less well your investment will perform.
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Yeah, anything that saves me having to manage things across multiple apps.
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