Suggest a saving product please

CYPER

I have £7000, which are currently staying in HSBC Online saver (3.53% interest after taxes) I realize this is not the best saving account out there, but it used to be. I haven't used my Cash ISA allowance this year as well.
Where would you suggest to put the money?

I was thinking about this drip-feeding options - one instant access with standing order facility and one regular saver. £500 a month sounds good to me. What do you think?

Thank you.

rathernot

Stick £3600 in a Cash ISA. Respectfully, the differences in interest between a top paying account and lower paying accounts is going to be negligible on the balance i.e. around a fiver a month - may not be worth the hassle of setting up multiple accounts, standing orders etc.

CYPER

rathernot wrote: »

Stick £3600 in a Cash ISA. Respectfully, the differences in interest between a top paying account and lower paying accounts is going to be negligible on the balance i.e. around a fiver a month - may not be worth the hassle of setting up multiple accounts, standing orders etc.

I'll probably do that, but I'm not exactly sure if I'm eligible to have 2 ISA accounts or 3?

April 2006 I opened a HSBC Cash ISA and put £3000
May 2007 I withdrew £3140 - my initial deposit + the interest

Since then I haven't used it at all, but I can see it still open and active in my online banking account. Recently I received some paperwork from HSBC about it, but I ignored it.

So do you think I can still use it as a separate allowance, but put the money somewhere else for a better rate? Do I have to first put £3600 in it and move them straight away?

Thank you.

Baldur

CYPER wrote: »

I'll probably do that, but I'm not exactly sure if I'm eligible to have 2 ISA accounts or 3?

April 2006 I opened a HSBC Cash ISA and put £3000
May 2007 I withdrew £3140 - my initial deposit + the interest

Since then I haven't used it at all, but I can see it still open and active in my online banking account. Recently I received some paperwork from HSBC about it, but I ignored it.

So do you think I can still use it as a separate allowance, but put the money somewhere else for a better rate? Do I have to first put £3600 in it and move them straight away?

You can have as many Cash ISA accounts as you like open BUT you can only pay new money (i.e. your annual allowance of £3,600) onto one Cash ISA in each tax year.

You can certainly transfer any funds remaining in your HSBC account to a new provider that accepts inward transfers and, as you haven't used any of this year's allowance, could pay up to £3,600 into that or a totally different Cash ISA account.

CYPER

Thank you, Baldur
I hope you don't mind some more questions

1. - As ISA's interest is tax free, can I consider 6.05% AER on £3600 = £217.8 monthly?
2. - If I invest right now how many full months do I have till April 2009? I reckon 5?
3. - From you last post I understood that right now I can only invest 3600 under my name and this HSBC ISA I have doesn't count as a second option?

Baldur

CYPER wrote: »

1. - As ISA's interest is tax free, can I consider 6.05% AER on £3600 = £217.8 monthly?

No £217.80 per year.

2. - If I invest right now how many full months do I have till April 2009? I reckon 5?

The number of months is irrelevant, as you can continue to save additional sums of up to £3,600 every tax year and the accrued interest on the balance (i.e. interest on interest) continues to earn tax-free interest.

3. - From you last post I understood that right now I can only invest 3600 under my name and this HSBC ISA I have doesn't count as a second option?

From your description of the withdrawal from HSBC ISA, it sounds as though there is little, if anything, left in there? If the account offers a good rate, you could pay this tax year's allowance into it but could not subscribe (pay new money into) to another Cash ISA until 6th April 2009.

CYPER

Baldur wrote: »

No £217.80 per year.

Yes, that was what I meant. My bad.

Baldur wrote: »

The number of months is irrelevant, as you can continue to save £3,600 every tax year and the accrued interest on the balance (i.e. interest on interest) continues to earn tax-free interest.

But let's say I invest £3600 now and with a rate of 6.05% I'll earn £18.15 each month by April 2009, when I'll have the opportunity to invest £3600 more. So in april 2010 I'll have 7290.75+441 = 7731.75 Theoretically speaking are these calculations correct?

Baldur wrote: »

From your description of the withdrawal from HSBC ISA, it sounds as though there is little, if anything, left in there? If the account offers a good rate, you could pay this tax year's allowance into it but could not subscribe (pay new money into) to another Cash ISA until 6th April 2009.

Nothing left in there. I should have put some money the last financial year :mad:

The_Fiddler_2

You can leave the money in your ISA, you don't have to take it out at the end of the year - if you do, you loose its tax free status.

Baldur

CYPER wrote: »

....let's say I invest £3600 now and with a rate of 6.05% I'll earn £18.15 each month by April 2009, when I'll have the opportunity to invest £3600 more. So in april 2010 I'll have 7290.75+441 = 7731.75 Theoretically speaking are these calculations correct?

Sorry, can't be bothered with calculations at the moment, especially as rates are likely to have changed (unless you have a fixed-rate product) but you'll have e.g. interest on £3,600 from date of deposit to 5th April 2009 then, assuming that you deposit next year's £3,600 on 6th April, you'll have a full year's interest on £7,200, plus the interest earned from now until 5th April 2009, by 5th April 2010.

CYPER

The_Fiddler wrote: »

You can leave the money in your ISA, you don't have to take it out at the end of the year - if you do, you loose its tax free status.

I don't really understand this. All these money has came from my job, so I have already paid tax on them. How many times am I supposed to pay tax on them? How do banks and/or HMRC know that a set amount of money have already been taxed?
Do you mean than if I take them out of the ISA account I have to pay taxes on the interest earned only?

blackswan2

Try Clydesdale, still offering 6% on one year fixed bonds, maybe good ISA rates as well?

Close Brothers have a great 7% if you can get the application to their office near Liverpool Street on Monday.