Interest can be paid away or compounded

cargo

Looking @ using mine and the mrs isa allowance for this year and next when it arrives.
Can some one please explain the above.
Does it make any differance.
Also our savings are with the halifax, and there isa is 5% fixed seems easiest to use them.
Or is this just lazy and it is better to spread money around various banks.

thx for looking.

EdInvestor

Does it make any difference.

It sure does Compound interest is the way to go because you get interest on the interest.

Example:

10,000 quid @5% over 10 years

Interest paid away, total at the end: 15,000
Interest compounded, total at the end: 16,289

This really mounts up with big sums.

Note that it goes against you when you are repaying debt

cargo

Thx for the info.
Examples like that are great cheers.

Man-Alive

cargo wrote:

our savings are with the halifax, and there isa is 5% fixed seems easiest to use them. Or is this just lazy ...

I have got a Cash ISA with the Halifax & I am happy with it. There are other providers paying slightly higher interest rates, altough some of these are paid as a new customer bonus.
If you are an existing Halifax customer it is really easy to set up - either on-line or over the phone. There is no need to prove your identity as they already know you. So you just need to sign & return a form that they will send to you in the post to get started.
You can also view your ISA on-line after you register it as part of your on-line portfolio.

cargo

Thx Man O.
I am in town tomorow so will call in and and open 2 cash mini isa's for Mr & Mrs @ the Halifax.