Using ISA for regular income

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  • System
    System Posts: 178,094 Community Admin
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    Just to add if you hold Fundsmith on a platform you will get the slightly cheaper 'I' class at 0.99% OCF, rather than the 'T' class at 1.09% OCF which is what you hold direct.

    So if you move to Charles Stanley, which has a 0.25% platform charge, you won't be much worse off - only 0.15% overall. I think it is a small price to pay for the increased flexibility, particularly if you are holding alongside other holdings and want to rebalance, add regular contributions in addition to other funds/ITs.

    I can't comment on particular recommended funds, but have a look at morningstar, trustnet for information. Having said that, you already hold a very good fund in Fundsmith so a solid start. If you are looking for income, perhaps take a look at equity income funds / perhaps high yield bond depending on your attitudes towards bonds.
  • jimjames
    jimjames Posts: 17,625 Forumite
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    TrustyOven wrote: »
    It's not though. It's increasing the value of the fund, but not increasing the number of units. Dividends are not paid depending on the value of your funds; they are paid depending on the number of units you have.

    But ACC units are worth a different amount to INC units.

    So the net value is the same. There is no benefit or difference in return between inc or acc, just the way the return is paid out.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • adamcartney
    adamcartney Posts: 22 Forumite
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    Sorry, maybe I should have explained why I propose doing this. I'm saving up for a deposit for a house and have the maximum amount saved in cash isas and the highest interest current and savings accounts - so I can't put any more money in there to earn decent interest.

    I'm looking for a way to invest the surplus of my monthly employment income in order to earn a decent return. (I understand that it is better to leave your money in for the long term but I can't afford to do that if I'm saving for a deposit).

    I think what people are saying on this forum is that it would be better to just put my cash into bank accounts rather than invest it for income which would tie up the capital?
  • PosterBoy77
    PosterBoy77 Posts: 358 Forumite
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    You could take out some regular savings accounts to save for a house. Saving short term for a house deposit in stocks, shares or similar is a gamble as your investment may not be worth what you put in when you need access to it.
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