What to do with a small cash ISA and deposit balance.

[Eleven]

Mrs Eleven has, it transpires, got a cash ISA with a few thousand in it and a deposit a/c with a slightly smaller sum in it. Both are with Halifax, with whom she now has no other banking relationship anymore. As far as I can make out she is getting the princely rate of 0.1% per annum on both accounts.

Halifax has told her that unless she does something with the accounts they will "freeze" them whatever that means.

I think it's a good idea for her to keep the cash stashed as a "rainy day" fund which would see us through a few months if something really bad happened. I cannot envisage anything that bad happening to be honest, because it would mean a wholesale destruction of everything we have worked for, but if suddenly we were broke the sum would keep a roof over our heads and the children fed for a few months.

So, what to do? Move the deposit to the ISA and move both to HSBC where she does her current a/c banking? Or something else.

If it matters, she works part time and is currently a basic rate tax payer.

Thoughts appreciated.

[gca117]

Working on the principal that you want to keep it as cash in a rainy day fund. I would say that if your good lady hasn't used up this years ISA allowance put it all in a cash ISA wrapper. Halifax have recently launched an 18 month fixed ISA @ 2% (currently one of the best buys in the media). This would tie it up for a shortish period until interest rates start to move hopefully allowing you to get a better rate in an instant access ISA in the future.

[Ginge R]

Rainy day funds are there for instant access, not 'just' for making money. So park it in the highest earning instant access cash ISA that you can, if for no other reason than to use this year's allowance. You can always transfer it to an investment ISA later if circumstances change.