A&L and Barclays 10% savings acc

mr_fishbulb

siuron wrote:

5.42% = £162.6 is still higher than the A&L 5.2% £156?

5.42% gross, which mean it will be less after tax is taken off. The 5.2% ISA is tax free.

siuron wrote:

also since its only for the 1st yr.. what happens if the have the same 10% deal next yr? can i not stay and carry on?

and if they dont, i can take the money to somewhere else without charges?

They move all your money from the regular saver to a normal saver account after 12 months and close the regular saver down.

Once it's in the savings account, you can take the money out with no fees.

You can start another regular savers account, but you will be back down to £0 again. There is no way to get 10% interest on the money you put in there the first time around.

siuron

in that case, is there a more efficient way to save my money? other than the ISA?

Ted_Bloke

siuron wrote:

that works out to be 4% overall, quite similar to ISA. so i guess i can see it as another ISA, because i cant open more than 1 ISA right?

Will it help to put it this way? - I know ppl often don't get it but a guiding priniciple is that money you haven't lent yet earns you zero interest.
Other principle is that ISA earnings are untaxed, other earnings are taxed.
So try and work everything out in rough calculations with these principles because no-one can write you down all the small possible variations beforehand.

a) So when you buy a £3,000 4% ISA in one go you get only 4% = £120 but you get it each year you hold it from the day you buy it, and tax-free.
b) If instead you buy the ISA by 12 £250 installments each month starting April it'll earn you only £60 the first year because half way through the year you've only lent half the £3,000; every year you hold it after the first will earn you £120 tax free. Keep it for 5 yrs. and you've got about £3,650.

What's different in the AL & Barclay's schemes is
1) The interest is higher, 10%
2) but it's taxed, making it for you probably in effect 8% on what you've put so far that year at any time
3) you can only buy them in monthly installments so by a calculation similar to b) above it makes you £120 after tax at the end of a year.
4) you can't keep it after a year in that account, AL/barclays are hoping you'll keep the £3,120 you end up with in some other account of theirs. (If you do this and can afford only one AL beats Barclays now because AL has the best current account, Barclays is pants 0% Martin says.) But you can also start a new savings scheme the following year - if they are still offering one by then.

siuron

i see. this is what i'm doing at the moment, so atleast i know i'm on the right track.

now.. when is it that i can start thinking about buying shares? as that seems to have high enough return?(compare to ISA?) with blue chip/low risk companies?

and what about pension? or those savings that are fixed for 5,10,15 yrs?

Anthony_MK

Last month I set up a 10% account with Barclays saving £250 a month (in my girlfriends name, so tax free) I was going to do the same with a A&L account, but I think you need to open a A&L current account that receives your salary (as you do with the barclays offering) so it's a no-go for me.

siuron

from what i know..A&L doesnt need a current acc??

Anthony_MK

I had a quick look on the A&L webiste and it seemed to suggest you do. I've just looked again and:

10% gross p.a./AER fixed for a year interest for regular savers when you
open a new Premier/Premier Direct Current Account

Q. How can I open a Premier Regular Saver?

A. Premier Regular Saver can be opened as part of a new Premier or Premier Direct Current Account application.
Visit Premier Regular Saver for more information.

yesbutnobut

siuron wrote:

from what i know..A&L doesnt need a current acc??

I think you do - see following link :

http://www.alliance-leicester.co.uk/savings/index.asp?page=home&ct=primarymenu

siuron

o well, openning a current acc with them is not a problem, but does it need to be like barclays where u have to have atleast £1000 going in a month?

Anthony_MK

With the name 'premier' I'd guess so, have a look at the link yesbut provided.