ISA - angry with DH

[Anonymousemouses]

I had a sum of money. DH told me to put it in savings, so I said I was going to put it in my instant cash ISA.

DH looked at that and said that the interest wasn't good (1.4), and found another high interest ISA -fixed term for a year - and got me to put it in there and transfer the money from my existing ISA there too.

I told him I wanted to be able to get at the money, and he said it was fine, you just get charged 90 days interest.

When I looked up the terms and conditions later, I noticed it said if you access it you may get back less than you put in. He told me not to worry.

But now I'm angry. We may have to claim UC after his redundancy pay runs out big he hasn't got another job, and they'll take that money into account, even though it will penalise me to access it.

I also worry about needing it in an emergency.

It's Lloyds if it makes a difference, it's £7000 and the interest is 5%.

I'm rubbish at maths, really bad, so I like to leave things as they are.

It does say you can close it within 14 days with no penalty, but I've no idea of the best way to save it, but access it if needed.

If it's not been 14 days yet then just close the account. Moneybox do a Cash ISA with a rate of 4.75% but you can make up to 3 withdrawals in 12 months without being penalised. There may be other better options too, you just need to shop around.

But you'll only potentially lose money though if you withdraw before 90 days? As you'll be charged 90 days interest but potentially won't have accrued 90 days interest?

I learnt the hard way. Never trust a man with your money even when he's telling you what to do with it.

How long has it been in this new account?

Chip instant cash isa 5.1%

90 days interest on 7k fixed at 5% would be £84

Thanks for the replies, it was opened this evening.

You should not lose money unless it s stocks and shares isa.
If you put 7k in isa you get back 7k plus any interest
If you have 7 k savings plus whatever else you had before it will impact uc claim
Above 16k will impact hugely

And learn more about interest rates watch some videos or take a class.
1 4 interest is rubbish rate for sure

Read money pages in a newspaper watch some videos moneysupermarket
You need to get money literate

Cancel it and sort it yourself.

They just mean that if you need to withdraw early on (before you have accrued 90 days' interest) the penalty will be more than the interest earned.

But it would have cost you money to leave it in a 1.4% account because the money would definitely be worth less at the end of the term in real terms

I can only see a one year Lloyds cash isa
at 4.4%?

@Anonymousemouses We may have to claim UC after his redundancy pay runs out big he hasn't got another job, and they'll take that money into account, even though it will penalise me to access it.

This part of your post makes no sense. In as much as, if you have savings of above £6000, it affects UC. Are you planning to spend it all before claiming UC?

Maybe it is that one, he set it up and said it was 5%

No, I'm hoping we won't need to claim it all, I was worried that if we did and it was included, then getting it out would cost 100s.

Cancel it. Open an instant access savings account instead. Most are offering 4.5% for them anyway. No need to fix it.

Getting out will cost £80 ish depending on actual rate if you cant leave it in 90 days
If you think you might need it dont lock it away - cancel and either open an easy access isa or an ordinary savings account. Anything is better than your 1.4%
And i recommend reading Martin Lewis guide to isas and savings on moneysavingexpert - very straightforward and very worth understanding

Your partner was right, 1.4% is rubbish at the moment however as pp has said you should open an easy access account if you want to be able to access your money at any time. You don't really need an ISA if you're only saving £7k as you won't go above your personal savings allowance threshold.

Leeds have one at 4.85% at the minute or Virgin Money have an account that you can make up to 3 withdrawals on at 4.76%.

Oh I see what you mean now. Yes, if you need to claim and it's included in the calculation, you will need easy access to draw down on it.

But on £7000, even on the highest rate of interest, you'll only be making about £350 in a year (unless my maths is letting me down). Surely for the sake of that amount, having easy access to your money is far more important than the interest it will earn - or is it?

Yes I'd agree but it doesn't have to be either/or. OP can move it to an account that allows instant access but still with a much better rate than 1.4%. I think they were right to move it, but not to something that's fixed for a year.

Yorkshire Building Society have an instant access account paying 4.6%. It’s easy to open an account online with them, they just check the electoral roll as ID.