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Post by oppsididitagain on Mar 28, 2024 14:53:52 GMT
As per the title
In the next Tax year would you invest in a Cash ISA with a bank/FSCS institution or buy a Cash fund / MM fund held in a S&S ISA
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Post by Harland Kearney on Mar 28, 2024 17:16:53 GMT
As per the title In the next Tax year would you invest in a Cash ISA with a bank/FSCS institution or buy a Cash fund / MM fund held in a S&S ISA A good strategy is often to use the CashISA to park the cash, then take advantage of the predictble *transfer* offers on wealth management platforms (Like HL for example) later in the year. You can end up earning extra cashback. I think the only reason to use MMF's on S&S (as a fund) is if you were either locked in (like a SIPP) or as a way to prevent cash drag when holding dry powder. We are in a period where MMF out paces inflation (if you believe in their numbers that is) but this is certainly going to be temporay and maybe still a loss once you take into account platform & fund fees on a MMF.
If the UK Interest rate drop faster than global rates, MMF's would outpace interest at the UK Banks.I hold some MMF's as dry powder in my HL account. I've only ever used Cash ISA to take advantage of switch offers between Cash ISA > S&S ISA as I said above. Rates which Cash ISAs give are often nearly identical to post tax normal accounts, so its really a waste of tax shelter for long term investing, albiet a higher rate earner perhaps.
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Greenwood2
Member of DD Central
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Post by Greenwood2 on Mar 28, 2024 17:23:28 GMT
Could you have a no idea option.
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Post by oppsididitagain on Mar 28, 2024 18:30:20 GMT
:-). Hence why I started the poll.
I should have added that..
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dead-money
Rocket to the Moon
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Post by dead-money on Mar 30, 2024 9:07:07 GMT
Third option - In an IFISA !
Loanpad's Flexible IFISA my current preferred choice for parking money for up to a year.
S&S ISA does hold MMF until there's sufficient to invest into Shares.
SIPP holds MMF until there's sufficient for Flexi-Access drawdown TFLS.
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rscal
Posts: 916
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Post by rscal on Mar 30, 2024 12:04:18 GMT
Are there restrictions from which types of ISA one may transfer if using a cash ISA to receive the transfer? (transferring small <£500 amounts of IFISA money are what I have as the source in mind)? I would assume banks (etc) are indifferent to receiving small amounts
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p2pfan
Member of DD Central
Full-Time Investor
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Post by p2pfan on Mar 30, 2024 16:44:12 GMT
Unless one needs access to one's money readily, Cash ISAs make no logical sense because one is parking away one's money for a lower return than the actual rate of inflation (which is higher than CPI). But most people don't understand the pernicious effect of inflation.
S&S ISAs and IFISAs invested into P2P give one an opportunity to beat inflation.
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rscal
Posts: 916
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Post by rscal on Mar 30, 2024 17:00:58 GMT
My working definition of Inflation is : "Twice whatever the Government says it is"
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Post by df on Mar 30, 2024 19:05:33 GMT
Unless one needs access to one's money readily, Cash ISAs make no logical sense because one is parking away one's money for a lower return than the actual rate of inflation (which is higher than CPI). But most people don't understand the pernicious effect of inflation. S&S ISAs and IFISAs invested into P2P give one an opportunity to beat inflation. Makes logical sense to me. Inflation is 3.4% atm, my Cash ISA is 5.25% fixed until 31st March 2025. Inflation may go up or down in the next 12 months, but I will get a guaranteed (no risk) 5.25% tax free. With S&S and P2P ISAs you may gain or may loose. I have IFISA with FS, luckily didn't loose any capital but would've been better off if I put this money into Cash ISA despite the rates offered by banks were ridiculously low at the time. Inflation affects everyone, but not at the same level. It depends on life style, spending habits etc. Doesn't affect my personal finances very much. My phone bill is increasing by 61p, Council tax and water will go up a little, energy bills will stay the same, fuel prices tend to go up and down but my annual milage is very low anyway...
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