Premium bond/isa

[Theukisgreatt]

Hi everyone

My husband and I have modest ISAs and also premium bonds. We haven't tended to add to the premium bonds because of a worry we might need a chunk of money quickly. However, my ISA has gone down to 0.1 so I'm thinking it may be more sensible and then we will waste less money too.

What is a sensible amount to keep 'easy access'?

I don't know too much about interest rates so if I'm asking something really stupid, please tell me.

Premium Bonds are easy access - if you have an online account you can cash them in any time.

Yup, premium bonds move money back to your account within about three days. Also any winnings are tax free. If you’ve got a decent chunk in savings though, I’d split it and have some accessible in premium bonds and some that might take a month or more to get hold of - maybe in something like a Vanguard investment account.

Thank you both this is really interesting. By easy access I meant that I could use immediately as if I make a big purchase I move money from my ISA. I haven't heard of the vanguard investment, so I will check that out, thank you.

Only invest once you have your easy access cash. If the market drops, like it has over the last few months, you face losing a lot of money on what you withdraw.

On the flipside, now might be a good time for long term investing, providing that the market goes back up again eventually.

Unless you have tens of thousands of pounds and/or are a higher rate tax payer, an ISA is a bit of a red herring these days as everyone has a personal savings allowance - £1000 of interest if you are a standard rate tax payer, £500 or less if a higher etc. You can get 1.2% on instant access, so should move your money to that sort of account, rather than leaving your money languishing in accounts that pay pretty much nothing.

If you wanted to buy something big, you could always use a credit card while you sorted out getting the money out of PBs, or leave a deposit and go back a few days later if a car or similar.