The Best Mini Cash ISA Article Discussion Area

LeeGolding

I'm about to apply for an A&L Direct ISA 2. I have £3000 to invest in a savings account.

1) Why on Martin's email, does he say 'The tax year ends April 5 and if you don't use your ISA allowance you lose it'?

2) Is this the best return I can get for saving this money over the next 12 months?

Thanks for any help!

Lee.

grumbler

LeeGolding wrote:

1) Why on Martin's email, does he say 'The tax year ends April 5 and if you don't use your ISA allowance you lose it'?

If you are not going to save another £3K next year, this doesn' matter for you. You have £3K allowance every tax year. If you dont put money into ISA before 5th of April, you lose this year allowance.

2) Is this the best return I can get for saving this money over the next 12 months?

This is the best rate at the moment. However, the rate is variable and nobody can guarantee that it remains the best for 12 months. You can transfer your ISA to other provider anytime.

See Mini-cash ISAs | Cash ISAs | ISA FAQs links in the blue box above.

david78

This is true grumbler, but if I could, I would put my £3000 in now rather than wait until after 5th April. One might not think they will be able to fund an ISA next year, but it may prove to be possible, especially if savings can be made using the different opportunities to be found elsewhere on this website.

mattsaze

My friend has saved for years to start uni.

I suggested to her that instead of using her own money to pay fees etc, she take a loan (both tuition and maintenance) from Student Loan Company and put her savings into a high interest (5%) ISA or similar (any suggestions?).

Question is - Do you know if her savings will accrue more interest than a Student Loan and thus be able to pay back the loan with her savings at the end of her course and cream off the extra earned interest for herself?

Thanks for any help

Heidspide

I want to open an ISA, but would probably need to withdraw the money in September this year. Would I still quality for the 0.7% A&L bonus or does that only get paid if you leave the money in until the end of April?

--Tony--

One think I don't understand.

My ISA's are with Abbey who were best last year.

I spoke to the chap on the phone who told me the balance which included interest added, I said "of course I will be paying tax on the interest as its over and above the £3000 allowance" but he said no I don't pay tax on the interest either???

Is this correct it does not make sense to me?

exel1966

Heidspide wrote:

I want to open an ISA, but would probably need to withdraw the money in September this year. Would I still quality for the 0.7% A&L bonus or does that only get paid if you leave the money in until the end of April?

You'll get the 0.7% fixed bonus each and every day up until you withdraw the money in September. You don't have to keep it there til April.

exel1966

--Tony-- wrote:

One think I don't understand.

My ISA's are with Abbey who were best last year.

I spoke to the chap on the phone who told me the balance which included interest added, I said "of course I will be paying tax on the interest as its over and above the £3000 allowance" but he said no I don't pay tax on the interest either???

Is this correct it does not make sense to me?

Yes it is correct. You do NOT pay tax on any interest earnt from an ISA whether it takes you over the £3k annual threshold or not.

sly_dog_jonah

mattsaze wrote:

My friend has saved for years to start uni.

I suggested to her that instead of using her own money to pay fees etc, she take a loan (both tuition and maintenance) from Student Loan Company and put her savings into a high interest (5%) ISA or similar (any suggestions?).

Question is - Do you know if her savings will accrue more interest than a Student Loan and thus be able to pay back the loan with her savings at the end of her course and cream off the extra earned interest for herself?

Thanks for any help

SLC interest is charged at inflation (or to be exact, the interest charged between Sept-Sept is based on the previous March's RPIX %, see the ONS website for details). The gains to be made by being disciplined and putting it all away in Cash ISAs are 2-3% per year, depending how inflation and interest rates move. If the loan is greater than £3k, she can use other savings accounts and get tax free interest (of rates approaching Cash ISA best buys) so long as she is a non-taxpayer (her non-loan income is less than the Income Tax allowance).

My friend advised me to do exactly the above back in 1999, I took him up on the idea and been able to not waste my Cash ISA allowances for those years when I would have otherwise.

--Tony--

exel1966 wrote:

Yes it is correct. You do NOT pay tax on any interest earnt from an ISA whether it takes you over the £3k annual threshold or not.

Thanks, I did not know that.

I was going to move my ISA'a from the Abbey to the new best, the A&L in April when I open my new one. Will I continue to pay no tax on the interest after I move to a new account or will the A&L consider this excess cash and charge tax?

Many thanks Tony