Best place to gain interest on £20k

[pinkyponkyplink]

I have almost £21k in a saving account earning 2.9% so I get around £50 a month interest. I can’t promise I won’t need access to it but I haven’t touched it for over 3 years, I’ve only added more into it.

what would be my best and safest option to gain more interest please? I’d like something I can log into on line

If you want access to it then an Easy Access Cash ISA is probably best, or a limited access one which allows a set number of withdrawals per year without loss of interest (normally 2 or 3 withdrawals). If you don’t think you will need access to it, for say a year, you could put it in a 1-year fixed ISA for a slightly better interest rate. The other option which means the money is accessible is Premium Bonds, but that doesn’t give you a guaranteed return, however it does give you the (small) chance of ‘winning big’. You could also split the money and do a mixture of the above.

I have not talked about investment ISAs because it doesn’t sound like you want a long term commitment at this stage.

For reference, my easy access ISA is paying 3.55% and my 1-year cash ISA (fixed in September) is 4.1%.

Chetwood, paragon and monument are all
paying around 3.8% instant access. If you look at flagstone that will give you most accounts that would work for you. Open up a flagstone account then you can put money into any account from there.

Thanks so much. Any suggested banks or is it best to stick to the two I use currently - Santander and Halifax?

Can I add more into a cash isa?

Cash ISA and do it soon because the chancellor is rumoured to be limiting the max you can add to £12k from April. I’m with Chip and it pays 3.80%. You can pay more into some of them but check as some limit deposits.

Moneysavingexpert.com says Chase pays 4.5% if you're new to them, but you can also sometimes get a temporary boost as an existing customer too.

However if you're a higher rate tax payer then that means some of your interest will be taxable so then ISAs might pay more even if the interest rate is slightly lower.

Depending on your circumstances, £21k could be quite a lot held as cash. You could weigh up the risk and decide how much needs to be in your cash emergency ISA pot (job loss, big house expense, whatever). And then start to invest anything on top of that if you have longer term plans for it (doesn’t have to be fancy - could start with a stocks and shares ISA - or LISA if you’re under 40 and happy for the money to be locked down).

I’ve just been looking online and Trading 212 looks good at 4.56%. Never heard of it thought. Is it protected? If the bank goes bump, will I get any money back? Is it safe?

@IdontknowwhatmynameisI’m over 40

You are referring to FCFS protection. I’ve not checked their own terms, but according to google Trading 212 are FCFS protected. The protection raises from £85k to £120k next week. Only thing to be aware of is that some institutes ‘share’ protection because they fall under the same banking group (I.e Lloyds and Halifax) so if you have over the FCFS limit across multiple banks it’s worth checking they don’t share protections. Years ago I think you could check this on the FCFS website so I presume you still can.

Money saving expert normally has a list of best rates for cash isas. a fixed bond could also be an idea, sometimes the interest rate is higher but you’d pay tax on interest so you’d have to do the maths. But I have a bond at 6.5% with nationwide.

I’ve got a Savings account (no restrictions on withdrawals) which pays 4.31% monthly (rate is 4.4% if you take the interest annually). It’s with Cahoot and I opened it recently because Martin Lewis said it was the best easy access one.

There is zero reason to stick to the banks you have, a bank is a bank is a bank. Go for the one with the highest interest that allows the withdrawal flexibility that you need

It maybe seems more complicated than it is, use MSE to find the highest rates

Cash ISA for sure. This guide will answer your questions & recommends providers.
The rates usually drop after 1 year, so at that point you look for another provider then transfer the Cash ISA from one to another. It's a simple process.

https://www.moneysavingexpert.com/savings/best-cash-isa/

@NotForTheMoneyandNotForTheApplauseso is the trading 212 one as safe as Santander?

When I go on trading 212 app, it is only showing 3.8% for a cash isa but online it advertises as 4.5%. I’m confused

Are you asking if it has the same legal protection from the FSCS then that will be on its website. If you're asking whether its more likely to go bust who can say

Out of interest I googled and although I didn't follow the link it seems pretty clear that if you do the rate is over 4%. It would be extremely unlike Martin Lewis to put out false information

stop scaremongering. The Cash ISA changes don't become effective until April 2027

I’ve registered with Trading 212. Finding it hard to trust a bank I’ve never heard of. It says it’s protected online. It is safe isn’t it? As in I will get my £20,000 back. And have access to it in a year?

I have mine with trading 212, been with them for a while now. Had no issues, withdrawn money as needed etc.

@ThingsgetbetterwithalittlebitofRazzmatazzthank you for your feedback. I’m just putting my details in. It’s asking if it’s an instant ban transfer or a bank transfer. What’s the difference?

Yes your money will be safe providing the institution is FCFS protected.

£20k locked up at 4.5% for a year will yield £919 interest. At 3.5% it will yield £700 interest. Only you can decide if you would rather take a lower interest rate with a bank you have heard of for peace of mind.

Can I keep adding into a cash isa?

Santander Edge savings is paying 6% but I think it is £4k maximum
United trust bank has an easy access at 4.3% but it will drop fairly soon, as I believe they all will