Where to save if you really don't care about Interest Rates?

nads

Hi,
I've decided I'm going to do some proper saving just £100 from my wages plus everything I earn from eBay and so on.

Would you say an ISA is the correct way to go? I don't care about interest tates (due to religious reasons) so would prefer saving that offered convenience or lower "fees" and fines.

Alfie_E

What are your religious reasons?

A Sharia’a-compliant savings account is provided by the Islamic Bank of Britain. HSBC Amanah Finance and Lloyds TSB have Sharia’a-compliant current accounts only.

If it’s more general ethical concerns, The Co-operative Bank are more ethically minded than most financial institutions.

If it’s a reason less specific than that, couldn’t you go for one of Martin’s best-buy ISAs or other savings accounts, and give any interest made to charity?

nads

CHeers Alfie, I'm a muslim so can't use Interest. I checked out these banks a while back and found the charges they applied where more expensive than my Halifax current account

The idea is that I mvoe money from my current account which gets deposited with wages, ebay, etx and then I move that to a "saving pot" that won't be touched by the tax man.

ariba10

nads wrote:

Hi,
I've decided I'm going to do some proper saving just £100 from my wages plus everything I earn from eBay and so on.

Would you say an ISA is the correct way to go? I don't care about interest tates (due to religious reasons) so would prefer saving that offered convenience or lower "fees" and fines.

What about under the mattress?

nads

I tried that but my family will keep taking £10, then £20 before I know it will all again oh and dont forget burglars!

codetown

nads wrote:

CHeers Alfie, I'm a muslim so can't use Interest. I checked out these banks a while back and found the charges they applied where more expensive than my Halifax current account

The idea is that I mvoe money from my current account which gets deposited with wages, ebay, etx and then I move that to a "saving pot" that won't be touched by the tax man.

Charges? I am surprised. With 'normal' banking operation is extremly difficult to get any charges in UK today (at least for personal accounts).
If you do I would strongly suggest to start changing bank immediately.
For example I would recommend Nationwide (and its easy to use e-savings account). I have been using its services (of all different types) for years and have yet to find one single charge from them!

While I understand your concerns about interests, I would recommend that you use all available means to get interest and pay lower tax (ISA plus good saving accounts) and then you give all the annual 'gain' to a charity of your choice.

My recommendations:
- bank account: Nationwide Flexaccount+ esaving account
- ISA Account: A&L Direct ISA (5.2%)

ReportInvestor

I know very little about banks in Muslim countries, nads.

Have you any idea if, or by how much, this Sharia Law holds back economic development?

cheerfulcat

nads wrote:

CHeers Alfie, I'm a muslim so can't use Interest. I checked out these banks a while back and found the charges they applied where more expensive than my Halifax current account

The idea is that I mvoe money from my current account which gets deposited with wages, ebay, etx and then I move that to a "saving pot" that won't be touched by the tax man.

What about Premium Bonds? No interest, just prizes, and they're tax-free...or a Social Capital account from Charity Bank, where you waive your entitlement to interest and in return they lend money to someone else at a lower rate?

Alfie_E

nads wrote:

I checked out these banks a while back and found the charges they applied where more expensive than my Halifax current account

Yes, I’ve just seen the Islamic Bank of Britain tariff list, and very much see your point!

ReportInvestor wrote:

Have you any idea if, or by how much, this Sharia Law holds back economic development?

See Islamic Banking? (Long article.)

cheerfulcat wrote:

What about Premium Bonds? No interest, just prizes, and they're tax-free...or a Social Capital account from Charity Bank, where you waive your entitlement to interest and in return they lend money to someone else at a lower rate?

From my extremely limited understanding, Premium Bonds seem like an excellent suggestion, and don’t seem to fall foul of Islamic restrictions on gambling. In terms of interest, the Social Capital account doesn’t seem any better than a basic bank account from a high-street bank that pays no interest – the money taken in is still lent out and the borrower charged interest. If all that’s wanted is an account that pays no interest, all the high street banks are happy to oblige

As well as interest, there are other constraints on what can be done with depositors’ money, for example, nothing to do with alcohol or tobacco. So, Premium Bonds, Charity Bank and banks like The Co-operative Bank are less likely to cause concern in that regard.

nads

ReportInvestor wrote:

I know very little about banks in Muslim countries, nads.

Have you any idea if, or by how much, this Sharia Law holds back economic development?

erm no, but if it means the difference between going to heaven or hell, then I know what I'll pick!

nads

hmm Premium bonds, never though about it always reminds me of oldie-worldy stuff!

Going to take a look...