ISAs are rubbish

I'm really starting to believe that ISA's are rubbish. ISA savings accounts (and normal bank accounts) pay so little it's simply ridiculous, Why are they promoted so much? So they are tax free, big deal. The rates are so low that a recent news article showed that people just can't be bothered anymore. 

When I took out my first ISA a couple of years ago it was about 5% return, then the rate dropped drastically. You can only put in a relatively tiny amount of money (£5100) each year, into a cash ISA. You can change ISA providers each year, but the process is cumbersome and not well administrated. If you are only getting a tiny amount of return on your money in an ISA, the fact that its not taxed means nothing. Whenever you sign up to an ISA that seems to be a good rate, instead of playing fair and keeping the rate at the level advertised, the bankers drop the rate later on when you are not looking.

At the moment, the top paying taxed savings accounts pay more than many untaxed ISA's. Even after tax, the return on your money in a top savings account can still be greater than an ISA. ISA's have the tendency to make you think "I've put the money in now, so I'll just forget about it". Then you don't realise a year later (or sooner), when they drop the interest rate. I'm just sick of banks luring in customers with high rates, then dropping the rate drastically, many times without notice. When I read Ramit Sethi's book "I will make you rich", I didn't agree at first, when he said it was too much hassle to keep opening new bank accounts, so he didn't bother chasing the new accounts with "higher" rates. I did not agree with the idea of trading extra bank interest for simplicity, but now I'm starting to think a  bit differently.

I've noticed that many rich people don't keep much money in the bank, it's mostly invested. The book The Richest Man in Babylon says idle gold is not good, and that money must be kept moving, through investments. ISA savings and bank accounts pay so little these days it's a joke. The few accounts that seem to pay a little bit of extra interest are soon reduced down to low levels, leaving the saver to start the search for a new bank account/ISA all over again. The problem is the administration in between, i.e. all the bank correspondence, new passwords, etc. I think this creates a possible security problem as more people have a chance to access your personal details. The book "The Richest Man in Babylon" says "a small return and a safe one is more desirable than risk".

I've currently got about 11 accounts with 8 different banks! I'm going to keep my life simple and prune everything down to just 2 banks. I'm going to stop worrying so much about bank interest and concentrate more on safety of savings, even though I will get a low rate of return. I will focus on making my money from my own investments, such as property, because right now, anything beats the bank. Savings rates are rubbish, and even with tax breaks, ISAs are rubbish.