isa's v other savings

gadzooks

Are isa's worth it, I know they are tax free but is there anything better in the current climate ? :rolleyes:

brewerdave

Depends on how much you have to invest , how long you can leave the money for,what your marginal tax rate is......How long is a piece of string??

gadzooks

My isa allowance has built up a fair bit over the years but am thinking of closing them and investing in someting short term at a better rate.I pay tax at standard rate.I am not a spring chicken so want to enjoy life while I still can.

gozomark

OP wants to save not invest

gadzooks

Sorry... I am new to this ... I want to save short term ,not invest.( gonzo... what does OP mean )

gozomark

OP -original post or original poster

gadzooks

Thanks Gozo

JeanMichelle

Gadzooks check what interest rate your ISA is now getting. I opened my ISA years ago with the Abbey National and left it thinking it would be fine but found out yesterday the interest rate had dropped to 0.1%. They are giving out better rates for new customers investing in new ISA's but long term customers have had theirs slashed. Money might as well be in my current account!! I just started a new thread on this and hopefully people will check their long term investments. )

apt

For an entirely clean ISA - no bonus, instant access, transfers-in allowed - you can get 2.75% from IF and 2.65% from Standard Life. That is better than comparable non-ISA accounts for taxpayers as well as preserving your ISA benefits for the future. If you are saving money for the short-term there are non-ISA options - one year regular savers, high interest current accounts - which will get more interest. But for longterm savings you should stick to cash ISAs, keep an eye open for good offers like the recent Newcastle 5% and regularly check what rates you are getting on variable-rate savings.

natman

Hi this debate will rumble on and on, but I have the same opinion all the time.
If you can save t x free try your best to do it and get the best rate you can.

Currently you can get a variety of ISA's on flexible or fixed term plans. Mine is currently at 3% tax free, lets take this scenario -

I have £10,000 savings kept in the ISA for a year will make £300
I would need an account of at least 3.75% to get the same return for the £10,000 investment.

Ok so theres accounts out there thats paying something like that but you have to tie your money up a bit into a 2 year fix.

My theory is this, lets just pretend for arguments sake -
My £10,000 gets me £300 interest -
From 1st April I have £10,300 I can then add to this the new ISA amount of £5100 add this together and I have £15,400 - this in another 12 month will earn me £370

Basically all I am saying is the compound interest is really worth thinking about.
Look at it another way I would always get my ISA allowance in a ISA savings plan every year, but i may choose the very last minute, ie. the end of march to invest.
Basically if you save for 10 years your ISA allowance you will have a tastey amount roughly £49500 plus all the interest over the years of saving earning interest tax free -

I would always keep an ISA open, I would always invest in a tax free saving scheme and try and get the best return, following this i would then look at other saving accounts -
fix term, bonds, instant access etc.

cash-magnet

Right now, this years isa cash allowance is sitting in a current account earning 6%, or 4.8% after I have paid the tax on it, so it is out-performing nearly every isa out there. I shall place it in an isa in March 2010 to lock in this years tax benefits in whatever isa is offering the best rates then. For now I would be losing money if this £3600 was in an isa account.