Remove ads

Introducing the LemonFools Personal Finance Calculators

Cash sitting in S&S ISAs

paradigm
Posts: 17
Joined: October 2nd, 2018, 11:45 am
Been thanked: 1 time

Cash sitting in S&S ISAs

#198480

Postby paradigm » February 2nd, 2019, 9:19 pm

Like many others (I suspect) substantial cash holdings have accumulated in my Stocks & Shares ISA accounts (waiting for even better times to invest!). These balances currently earn no interest and unfortunately neither of my ISA accounts are of the 'flexible' type which would allow the cash component to be withdrawn in order to earn some interest elsewhere before being returned to the ISA account within the same tax year (to remain under the ISA umbrella).

I would be interested in any suggestions on where to invest cash within an ISA to earn at least some return with minimal risk to capital. The vehicle would need to be readily tradeable when the funds are required for stock investment. Perhaps some kind of cash trust or similar would fit the bill? I'm sure this is not a new issue but what do others do in this situation?

Lootman
Lemon Quarter
Posts: 4975
Joined: November 4th, 2016, 3:58 pm
Has thanked: 20 times
Been thanked: 795 times

Re: Cash sitting in S&S ISAs

#198482

Postby Lootman » February 2nd, 2019, 9:22 pm

For this purpose I use ERNS, which is a cash-equivalent ETF from iShares.

The interest rate isn't great but it is safe, being a de facto money market fund.

In a taxable account its income may be taxed as dividends rather than interest - I'm not sure.

paulnumbers
2 Lemon pips
Posts: 238
Joined: November 4th, 2016, 2:15 am
Has thanked: 9 times
Been thanked: 34 times

Re: Cash sitting in S&S ISAs

#198547

Postby paulnumbers » February 3rd, 2019, 11:27 am

paradigm wrote:Like many others (I suspect) substantial cash holdings have accumulated in my Stocks & Shares ISA accounts (waiting for even better times to invest!). These balances currently earn no interest and unfortunately neither of my ISA accounts are of the 'flexible' type which would allow the cash component to be withdrawn in order to earn some interest elsewhere before being returned to the ISA account within the same tax year (to remain under the ISA umbrella).

I would be interested in any suggestions on where to invest cash within an ISA to earn at least some return with minimal risk to capital. The vehicle would need to be readily tradeable when the funds are required for stock investment. Perhaps some kind of cash trust or similar would fit the bill? I'm sure this is not a new issue but what do others do in this situation?


Perhaps no use for your situation but thought I'd mention it. If you switch the ISA to Vangaurd, you can then withdraw the money (the Vanguard broker is flexible).

paradigm
Posts: 17
Joined: October 2nd, 2018, 11:45 am
Been thanked: 1 time

Re: Cash sitting in S&S ISAs

#198551

Postby paradigm » February 3rd, 2019, 11:46 am

Thanks for the suggestions.

I did see that Vanguard are one of the few platform to offer flexible S&S ISAs - they also do pay some interest on cash held. The downside is that their ISAs are restricted to holdings of Vanguard funds - also, I recollect that their ISA admin charges are high (I would need to recheck this) although their fund charges are very competitive.

swill453
Lemon Quarter
Posts: 2011
Joined: November 4th, 2016, 6:11 pm
Has thanked: 118 times
Been thanked: 495 times

Re: Cash sitting in S&S ISAs

#198573

Postby swill453 » February 3rd, 2019, 1:53 pm

paradigm wrote:Like many others (I suspect) substantial cash holdings have accumulated in my Stocks & Shares ISA accounts (waiting for even better times to invest!). These balances currently earn no interest and unfortunately neither of my ISA accounts are of the 'flexible' type which would allow the cash component to be withdrawn in order to earn some interest elsewhere before being returned to the ISA account within the same tax year (to remain under the ISA umbrella).

That's true, but you could still transfer it to a cash ISA to earn some interest, then transfer it back again when you want to invest it.

(These transfers won't happen instantly though).

Scott.

paradigm
Posts: 17
Joined: October 2nd, 2018, 11:45 am
Been thanked: 1 time

Re: Cash sitting in S&S ISAs

#199047

Postby paradigm » February 5th, 2019, 12:22 pm

swill453 wrote:
paradigm wrote:Like many others (I suspect) substantial cash holdings have accumulated in my Stocks & Shares ISA accounts (waiting for even better times to invest!). These balances currently earn no interest and unfortunately neither of my ISA accounts are of the 'flexible' type which would allow the cash component to be withdrawn in order to earn some interest elsewhere before being returned to the ISA account within the same tax year (to remain under the ISA umbrella).

That's true, but you could still transfer it to a cash ISA to earn some interest, then transfer it back again when you want to invest it.

(These transfers won't happen instantly though).

Scott.


Yes, thanks for this.
I would need to check the ISA regulations again, but I recall that transfers can be done from a cash ISA to a S&S ISA but not vice-versa (for valid reasons). Also, the cash component held within a S&S ISA would represent a partial transfer only which may not be possible. As you say, ISA transfers take time and for same day investing in shares some kind of cash fund yielding at least some interest may be the best answer for holding cash pending investment.

swill453
Lemon Quarter
Posts: 2011
Joined: November 4th, 2016, 6:11 pm
Has thanked: 118 times
Been thanked: 495 times

Re: Cash sitting in S&S ISAs

#199050

Postby swill453 » February 5th, 2019, 12:34 pm

paradigm wrote:Yes, thanks for this.
I would need to check the ISA regulations again, but I recall that transfers can be done from a cash ISA to a S&S ISA but not vice-versa (for valid reasons). Also, the cash component held within a S&S ISA would represent a partial transfer only which may not be possible. As you say, ISA transfers take time and for same day investing in shares some kind of cash fund yielding at least some interest may be the best answer for holding cash pending investment.

These days you can transfer cash in both directions between cash ISAs and S&S ISAs.

Of course you have to have a provider who will allow a partial transfer if that's what you need.

Scott.

pochisoldi
Lemon Slice
Posts: 371
Joined: November 4th, 2016, 11:33 am
Has thanked: 5 times
Been thanked: 184 times

Re: Cash sitting in S&S ISAs

#199118

Postby pochisoldi » February 5th, 2019, 5:56 pm

swill453 wrote:
paradigm wrote:Like many others (I suspect) substantial cash holdings have accumulated in my Stocks & Shares ISA accounts (waiting for even better times to invest!). These balances currently earn no interest and unfortunately neither of my ISA accounts are of the 'flexible' type which would allow the cash component to be withdrawn in order to earn some interest elsewhere before being returned to the ISA account within the same tax year (to remain under the ISA umbrella).

That's true, but you could still transfer it to a cash ISA to earn some interest, then transfer it back again when you want to invest it.

(These transfers won't happen instantly though).

Scott.


I did some transfers from a cash ISA to L&G a few years ago. It took at least 4 weeks, and this was in the days when you could do a "cash to cash" ISA transfer in 10 calendar days.

Not sure if this is typical of transferring to a S&S ISA, or the more likely explanation of L&G being keen to take customers back to 1970's levels of (dis)service.

Cookie
Lemon Pip
Posts: 60
Joined: January 27th, 2018, 10:19 pm
Has thanked: 29 times
Been thanked: 1 time

Re: Cash sitting in S&S ISAs

#201451

Postby Cookie » February 14th, 2019, 10:46 pm

How do you find cash drag Vs having cash to hand for opportunities?

Wouldn't regular investment simply even out returns?


Return to “Bank Accounts Savings & ISAs”

Who is online

Users browsing this forum: No registered users and 1 guest