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Savings Account vs ISA and Premium Bonds...yeh, I know....
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nigelF
Posts: 17 Forumite
Hi all.
Ok, we're living in Portugal but my earnings are in Sterling.... I have £30k in premium bonds and my partner has £15k in a Nationwide Instant Access ISA, and £10k in her e-savers account.
Looking at Martins site, I've also recently opened a Kaupthing Edge savings accounts (6.55) and trying to put a regular amount in that also.
The idea is to be able to pay off our mortgage in a couple of years when hopefully the sterling vs euro has gotten a bit better and our mortage balance is a couple of years lower, but that's another story....
My question is, should we just take the money out of the ISA, e-savings and bonds, and lump it all into the Kaupthing Edge account? Or am I missing a few tricks somewhere.
Thanks.
Nigel
Ok, we're living in Portugal but my earnings are in Sterling.... I have £30k in premium bonds and my partner has £15k in a Nationwide Instant Access ISA, and £10k in her e-savers account.
Looking at Martins site, I've also recently opened a Kaupthing Edge savings accounts (6.55) and trying to put a regular amount in that also.
The idea is to be able to pay off our mortgage in a couple of years when hopefully the sterling vs euro has gotten a bit better and our mortage balance is a couple of years lower, but that's another story....
My question is, should we just take the money out of the ISA, e-savings and bonds, and lump it all into the Kaupthing Edge account? Or am I missing a few tricks somewhere.
Thanks.
Nigel
0
Comments
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Ignopring money exchange costs,
ISA - only consider removing the funds if your mortgage rate is higher than the ISA rate
e-savings - as above after tax has been factored in
Premium Bonds - definitely get shot unless you like gambling a lot. £15K left invested in a top ISA will return £1,830. In PBs you have a 98.7% chance of 'winning' less. The other £15K would earn £1,572 if invested in a top savings account (assuming basic rate tax paid). Your PBs have a 95.9% chance of 'winning' less. Premium Bonds are pants.
Why wait two years? Is your mortgage fixed at a low rate?
GGThere are 10 types of people in this world. Those who understand binary and those that don't.0 -
Hi GG
Yes, I suppose it's fairly easy to calculate isn't it....if the interest earned is more than the interest on the mortgage - keep paying the mortgage until the break-even point of paying it off.
I liked the idea of 'safe' gambling with premium bonds, but in my heart I know it would be better off invested elsewhere... I think I will shift them...
ISAs are not possible for us now we are living in Portugal - we just can't have one now...
Our mortgage is pretty low rate although I'm embarassed to say I don't know where we're at with it...It was an early Barclays offer of a fixed % over euribor for the term - at the time it was very good offer - I wouldn't want to mess around with it now. The reason we want to pay off the mortgage is for security and knowing that we don't need to earn as much cash each month....
Ahhh, good times....
I better do some homework...
Nigel0
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