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What to do with £4k

Hi all,

First post, so be gentle! ;)

I have £4k (with the Lloyds TSB) which I would like to get working for me. I was thinking of opening an account with Kaupthing Edge and putting the £4k in there (read good things about them on here) and leaving it to get me some interest, but how much interest would it make each month?

Only time I'd touch the £4k is in the event of an emergency.

I don't have any credit cards. I am paying back a loan to the bank (Lloyds TSB) but they can wait. :D

Any advice would be much appreciated!
«1

Comments

  • Iguana
    Iguana Posts: 1,781 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    do you have an ISA?
  • Iguana wrote: »
    do you have an ISA?

    I don't, no.

    Is an ISA better than a Kaupthing Edge account? :confused:

    (excuse my ignorance, I'm new at all this banking stuff)
  • Aegis
    Aegis Posts: 5,695 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    ronniet wrote: »
    I don't, no.

    Is an ISA better than a Kaupthing Edge account? :confused:

    (excuse my ignorance, I'm new at all this banking stuff)
    An ISA is tax free. Unless you're a non-taxpayer and registered as such with your bank, you'll have 20% of your interest deducted as source to cover your income tax liability.
    I am a Chartered Financial Planner
    Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.
  • Aegis wrote: »
    An ISA is tax free. Unless you're a non-taxpayer and registered as such with your bank, you'll have 20% of your interest deducted as source to cover your income tax liability.

    So if I was to max out an ISA with £3.5k, what would the interest on that be?

    Are all ISA's roughly the same? Are LloydsTSB ISA's good/bad?...

    Thanks for taking the time to help me out folks, I really appreciate it.
  • Aegis
    Aegis Posts: 5,695 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    ronniet wrote: »
    So if I was to max out an ISA with £3.5k, what would the interest on that be?

    Are all ISA's roughly the same? Are LloydsTSB ISA's good/bad?...

    Thanks for taking the time to help me out folks, I really appreciate it.
    The interest rate varies as much as with normal savings accounts. One of the best variable rates at the moment would probably be 6.25% tax free. I'm not sure how Lloyds compares to that, but I suspect they're not as good.
    I am a Chartered Financial Planner
    Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.
  • Iguana
    Iguana Posts: 1,781 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Read Martin; he does it better than me:

    http://www.moneysavingexpert.com/savings/best-cash-isa
  • a7man
    a7man Posts: 365 Forumite
    Whats the rate of interest on your loan!? If the interest on your loan is higher then the amount you will make off an ISA investment you will just be wasting money.
    Living the good life spending all my money but loving it!!
  • a7man wrote: »
    Whats the rate of interest on your loan!? If the interest on your loan is higher then the amount you will make off an ISA investment you will just be wasting money.

    Off the top of my head, I believe it's about 1 to 1.5% on my loan. It'll be payed back within seven years which will leave me debt free :j
  • Aegis
    Aegis Posts: 5,695 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    ronniet wrote: »
    Off the top of my head, I believe it's about 1 to 1.5% on my loan. It'll be payed back within seven years which will leave me debt free :j
    Are you sure about that loan interest rate? Most loans from banks at the moment would be closer to 10% than 1%, and I can't think of a single time in the last decade where 1.5% loans would have been offered (i.e. below the bank of England base rate)...
    I am a Chartered Financial Planner
    Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.
  • a7man
    a7man Posts: 365 Forumite
    Yeah I'd almost certainly say pay off the loan first (as long as there are no penalties for early settlement). If there was a loan available for 1% everyone would take it and invest the money.
    Living the good life spending all my money but loving it!!
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