Isa lifetime?

carnet

deemy2004 wrote:

And since the stock market perked up many are also using their Mini ISa allowances up as well

Presumably you mean Mini Stocks & Shares ISAs ?

even though the benefits there are less evident, given the quarterly charges by most brokers

What quarterly charges ? I've never paid 'em to any broker - and suggest anyone who does moves elsewhere.

deemy2004

carnet wrote:

Presumably you mean Mini Stocks & Shares ISAs ?






What quarterly charges ? I've never paid 'em to any broker - and suggest anyone who does moves elsewhere.

Quarterly charges on self select ISA's range from about £6.25 to about £25 per quarter. Is there one that does not charge ?

offcourse the fund ISA's carry their own charges i.e. 5% for buying in or more, plus the annual management fees of 1 to 3% So on £3k equates to about 210 for the first year.

deemy2004

dunstonh wrote:

No mention on the charges on cash ISAs then? What if funds were priced the same way as savings accounts, would you comment the same way then?

Cash ISa's are completely different - they don't carry anywhere near the risk ! not comparable...

dunstonh

deemy2004 wrote:

Cash ISa's are completely different - they don't carry anywhere near the risk ! not comparable...

How are they not comparable? Both take lump sums, both provide a return which is subject to a profit margin. One you can see the profit margin, one you cannot. Risk is not an issue when it comes to charges.

deemy2004

dunstonh wrote:

How are they not comparable? Both take lump sums, both provide a return which is subject to a profit margin. One you can see the profit margin, one you cannot. Risk is not an issue when it comes to charges.

Cash ISA's start earning interest from day 1

Fund ISA's are immediatly looking at a loss of about 5% or more

Cash ISA's accrue interest on a daily basis,without missing a single days.

Fund ISA's value goes up or down, depending on whether the fund goes up or down.

Cash ISA - You know with near certainty that you will make a gain.

Fund ISA's - The risk is that you will make a loss.

There is no comparison between, them they are completely different animals !

EdInvestor

Risk is not an issue when it comes to charges.

It's a funny thing about risk.

If there's a low risk of losing your money (eg with cash) you pay nil or very low charges.

If there's a high risk of loss(eg with stockmarket funds) you pay high charges.


You'd think it would be the other way round, wouldn't you?

dunstonh

Correct, they are different types of investments. However, they still both have a profit margin.

Cash ISA returns are dependent on how much money the bank makes in other areas and how much profit they want to cream off it. If they have a good year, they can have a massive profit. If they have a bad year, they may run at a loss. OMG, it sounds like a with profits fund . Unit Trust/Oeic Funds have a defined charge that they can take from the profit regardless of how they perform.

Funds use charges to cover costs and make a profit.

Are you saying that Cash ISAs do not cover charges and make a profit?

If there's a low risk of losing your money (eg with cash) you pay nil or very low charges.

Where are you paying the charges though? You are correct that lower risk investment funds tend to have lower charges. Although less work usually goes into them.

If you see a financial advisor and its done on commission, do you pay nil? No, the charges within the products arranged cover the commission. If you paid a fixed defined fee, then the charges in the plan would be lower. That is how Cash ISAs and Savings accounts work. They are not doing it for love. The savings accounts are being creamed at an unknown rate before they pay you the savings rate. I wonder what the rates would be like if you got 1% AMC on a savings account?

carnet

deemy2004 wrote:

Fund ISA's are immediatly looking at a loss of about 5% or more

Go through a discount broker (as, hopefully, all fund investors, not requiring advice, who read these boards will) and the IC is more like 0.5% and, on many funds, sometimes less or even nil.

ReportInvestor

dunstonh wrote:

Are you saying that Cash ISAs do not cover charges and make a profit?

The one's we invest in don't make a profit from us, dh .

deemy2004

Well whether or not Northern Rock makes a profit my 6% TESSA is fixed for 4 years. (3 left).

So yes in which case they will have to PAY interest whether they make a profit or a loss !