Am I being utterly stupid keeping money in my current accnt ?

nudda

ok i just sat and thought about this and figured that theres no point me putting my money into an ISA as I have debts. the interest on those are more than what I would earn in interest if I put my money into some account.

Am I correct or missing something ?

nudda

innovate wrote: »

nudda, read up about ISAs, there's a specific thread for those. Your max annual payment into a cash ISA is currently £3600.

Also, there's a specific ISA section on the site: http://www.moneysavingexpert.com/savings/best-cash-isa

Thanks.
Funny, I just read soem bits on that page before your msg But this got me thinking ... hence my last post.

nudda

anniecave wrote: »

I wouldn't keep lots of money in a current account anyway. Possibility it may get taken out fraudulently via someone cloning your debit card for example.

An ISA is a specific type of savings account, where the interest is paid income tax free. You can only pay a maximum of £3600 per tax year into an ISA, and you can withdraw the money, but you can't then pay the value you have withdrawn back in during the same tax year. So it's best to use an ISA for longer term savings.

For the rest of your money, I would just open an instant access savings account. Check carefully when looking for this, as a few say they are instant access, but then have resrictions on how many withdrawals you can make per year, or don't pay interest for a month if you do make a withdrawal.

Wow, nice read. Many thanks.

Got two questions:-

1) IF I do go for a cash ISA, I cant see this being too worth while. Again, I am probably being stupid but if I put in £3600 @ 3.5% AER then I am only earning £126 on this. I dont see this as being worthwhile ... can someone elighten me please ?

2) I thought ISA = Instand savings account ... so how can I open up another one and put the rest of the money in there ? (another dumb question by me!)

Thanks again

chelseabun_3

Hi nudda,

ISA = Individual Savings Account (NOT Instant!)

They are really for longer term investment where you want to save regularly year by year. They're still a very good interest rate at the moment if you pick a good one, with no risk to your savings. The point of an ISA is that you don't get charged tax on the interest, so over time you can build up more savings. But yes, it is a slow process.

nudda

chelseabun wrote: »

Hi nudda,

ISA = Individual Savings Account (NOT Instant!)

They are really for longer term investment where you want to save regularly year by year. They're still a very good interest rate at the moment if you pick a good one, with no risk to your savings. The point of an ISA is that you don't get charged tax on the interest, so over time you can build up more savings. But yes, it is a slow process.

Thanks

I see it as, I would rather put the £3600 into, say, getting a second hand car and selling it at a profit of £300-400. That way I can make more ... tax free!

I personally think Alternative investments are better albeit more work.

my 2 cents worth

chelseabun_3

That certainly makes sense from the point of view of making more money! However, in the current climate the secondhand car market has nosedived, and there is no guarantee of selling easily to make money, as I'm sure you're aware. The best way to hedge your bets is to save regularly, in a variety of places, as well as playing around with buying and selling. However if you have debts the best thing to do is get them paid off asap, before saving any great amount. The DFW board is useful for info on how to do that.

nudda

chelseabun wrote: »

That certainly makes sense from the point of view of making more money! However, in the current climate the secondhand car market has nosedived, and there is no guarantee of selling easily to make money, as I'm sure you're aware. The best way to hedge your bets is to save regularly, in a variety of places, as well as playing around with buying and selling. However if you have debts the best thing to do is get them paid off asap, before saving any great amount. The DFW board is useful for info on how to do that.

top stuff - thanks again
going over to the DFW board now ...

agsnu

nudda wrote: »

I see it as, I would rather put the £3600 into, say, getting a second hand car and selling it at a profit of £300-400. That way I can make more ... tax free!

Or perhaps paying off those debts you said you had at higher rates of interest than you'd get on a savings account?

h5djr

If you have a Lloyds TSB current account and change it to a Vantage account and keep a balance between £5,000 and £7,000, they will pay 5% interest on the whole account.

nudda

agsnu wrote: »

Or perhaps paying off those debts you said you had at higher rates of interest than you'd get on a savings account?

Exactly. Obviously will get rid of lowest amounts on highest interest accounts first and go on from there depending on what I can afford to remove.
Anyone got a nice spreadsheet for this kind of stuff ?