ISA query ? estimated value needed...

Lopo · 16 August 2005 at 10:53AM

Hi all,

Just curious as to the below, wondering if anyone can help....

If you took out a mini-cash ISA when they first became available...assuming average interest rates or (actual if you know them!!) and you always made a deposit of the maximum £3000 limit on the first day of each new ISA year since then,...any idea what the total amount should be present day please including the compounded interest?

Appreciate if anyone could provide me with an rough figure.

Thanks in advance.

Lopo

lipidicman · 16 August 2005 at 11:46AM

Assuming 4% you would have deposited £21k and would have £24k on deposit

To do anything more accurate we would need to know which ISA and the historical rates!

I used excel and did compounding, and accounted for the fact that we are around 5 months into the tax year

grumbler · 16 August 2005 at 11:54AM

AFAIK ISA was launched in April 1999. 'Factual' interes rate depends on bank. Let's take average rate i=6%=0.06, n=6 years till April 2005 and A=3000 annual amount saved.

q=1+i

In Apr 2005 (before last 3000 were added) we have:

A*q*(q^n-1)/(q-1)=3000*1.06*(1.06^6-1)/(1.06-1)=22182

for i=5% result is 21426

compound interest-how do I work it out? thread.

P.S. for i=4% result is 20695, but I think this is too pessimistic estimation of averarge rate. I remember it being about 7%.

lipidicman · 16 August 2005 at 1:12PM

Hi Grumbler!

grumbler wrote:

P.S. for i=4% result is 20695

now add your £3k for this year and about 6 months interest and our figures agree :beer:

I don't really know what the average rate over the period was. I think you are right. I remember getting between 6.5 and 4.75 over those years. But then again I had (nearly) the best buys most of the time. 4% might be an average for the market - as I have said, we would need to know more to give an accurate figure!

Lopo · 16 August 2005 at 7:54PM

Thanks for that....sounds about right I believe.

Met an old buddy the other day and while discussing ways of the world, cars, football, beer, women, money etc...ended up at one point talking about the pros and cons of isa's.

Indicated they happily had £23,594.27 to date currently topped up fully, but not from the begining of each isa year, once only having filled it on the last day of an isa year...!

Concluded whoever they banked with was doing quite well considering the figure achieved to date. I now reckon that very few ( - if any ) out there have managed to get it to £24k+ !?

Anyone willing to fess up if they have currently broken the 24k barrier, or are perhaps just a couple of months of interest away from it ?!!!?!!

Just curious to know if £24k is achievable...

Lopo

ffacoffipawb · 16 August 2005 at 8:03PM

Lopo wrote:

Thanks for that....sounds about right I believe.

Met an old buddy the other day and while discussing ways of the world, cars, football, beer, women, money etc...ended up at one point talking about the pros and cons of isa's.

Indicated they happily had £23,594.27 to date currently topped up fully, but not from the begining of each isa year, once only having filled it on the last day of an isa year...!

Concluded whoever they banked with was doing quite well considering the figure achieved to date. I now reckon that very few ( - if any ) out there have managed to get it to £24k+ !?

Anyone willing to fess up if they have currently broken the 24k barrier, or are perhaps just a couple of months of interest away from it ?!!!?!!

Just curious to know if £24k is achievable...

Lopo

I have over £35k in my IF mini cash ISA (the £21k ISA contributions augmented with £9k from a matured TESSA and £5k in interest).

Lopo · 16 August 2005 at 8:07PM

ffacoffipawb wrote:

I have over £35k in my IF mini cash ISA (the £21k ISA contributions augmented with £9k from a matured TESSA and £5k in interest).

Crickey! - impressive!

I guess my OP query was perhaps a little unclear,...to clarify - I meant an isa from when first available topped yearly on day one, not including the tessa variations that exist.

Thanks nonetheless!

Lopo

ManAtHome · 16 August 2005 at 8:54PM

I've probably just scraped £24k, was £23,740 at 5th April and that's without applying on 6th April every year (at least 2 years investments were Feb/March time).

isasmurf · 16 August 2005 at 10:13PM

Anybody that has invested £3,000 at the beginning of each tax year at average bank and building society ISA interest rates would have a balance of around £24,399.47.

(Balance with average Bank interest rates would be around £24,303
Balance with average Building Society interest rates would be around £24,545)

If you transferred a matured TESSA when ISAs started you would have around £36,671.21 with the average ISA interest rate.

Edit: to add anyone investing with market leading rates would obviously have more. To give some indication of averages (in order of Bank, Building Society, Bank & BS)
Highest: 6.64%, 6.71%, 6.67% (all April 2000)
Lowest: 3.3%, 3.49%, 3.38% (all September/October 2003)
Current (July): 4.33%, 4.79%, 4.5%

(source of average ISA interest rates: Bank of England)

Lopo · 17 August 2005 at 9:40PM

Thanks for that isasmurf....useful detail.

So is anyone reaching £100pcm in interest yet from an isa?

Lopo

ISA query ? estimated value needed...

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