Opening first ISA, need advice and opinions

Howfener

Hi guys.

First — sorry if starting a new thread for something like this is poor form.

I've decided to grow up and take care of my money and for the first time in my life I have created a budget. Starting from October I've got around £600 per month to put into savings. This works out nicely to £3,600 before April 2010. Exactly the most that can be placed in an ISA in one economic year.

I have two questions:

1. What is the best ISA to put my money in? Some things to consider:

• I want instant access to my money in case of an emergency.
• I'm currently a NatWest customer and am very happy with their service since I signed up about ten years ago. However, I've heard bad reviews of their ISAs. Is their e-ISA any better? I'd prefer to stay with NatWest so I can manage my current account, credit card and ISA from the same webpage.
• I understand that Intelligent Finance offers the best interest rate at 2.75%. However how much does this vary? Is this company one of the most competitive? Is it even reputable?
• I'm wary of Googling reviews — has anyone here had good/bad experience with either NatWest e-ISA or Intelligent Finance's ISA? Any other recommendations?

2. What should I do with any excess money I have?

• I will have at least £60 per month left over after putting money in my ISA. This means that I will have at least £360 — more likely £500 since my full budget is quite liberal — by the time the next economic year comes around.
• I think I'm just going to keep it in my current account (terrible interest rate as it's a student account) until the ISA allowance increases in April 09/10, and then just add it in with April's instalment.

Any thoughts on either question? Thanks!

Lokolo

1. No point looking now as October is 2 months away. A lot can change in 2 months. Everyone has different experiences with banks so what one person thinks could be completely different what another thinks.
Wait until October before looking.

Banks tend to open new accounts with decent rates, but then degrade the interest rate over time. 99% of the time this is what happens no matter what bank you go to. This is why I like fixed accounts.

2. For the way interest rates are at the moment, and the amount thats going in, I wouldn't bother opening a savings account for it, and do as you suggested yourself and keep it in current account. Then come April you can put it in a new ISA.

andydavies

If I were you I wouldn't solely look at Natwest simply because it's more convenient, there are many other financial providers out there that can offer very competitive interest rates on their ISAs and you will kick yourself if you put your money in to a particular ISA then realise you could have got a better deal elsewhere.

With the extra cash that you'll have left over, there are many savings accounts that offer good interest rates when you first open them so you could see that as a short-term investment. Savings accounts will generally offer better rates than current accounts and you can enjoy the introductory rates.

To compare a range of ISAs from many providers these sites are quite useful. moneysupermarket.com, fairinvestment.co.uk, moneyextra.com

Hope you find what you're looking for!

Reaper

When you are ready to get an ISA the best ones are listed here.

financial_illiterate

Howfener wrote: »

1. What is the best ISA to put my money in? Some things to consider:

• I want instant access to my money in case of an emergency.
• I'm currently a NatWest customer and am very happy with their service since I signed up about ten years ago. However, I've heard bad reviews of their ISAs. Is their e-ISA any better? I'd prefer to stay with NatWest so I can manage my current account, credit card and ISA from the same webpage.

2. What should I do with any excess money I have?

I've got the Natwest E-ISA, transferred last years money in from a Natwest Cash Isa and have had no problems whatsoever with it. It's as instant access as an online account can get, because you can move money to and fro between it and any other Natwest accounts at the click of a mouse. The interest rate has dipped 1% for new money since I opened mine, but its still not the worst out there (0.5% worse than the best one I think).

Mind you, by October anything could have changed and there might be a second round of ISA offers this year when the battle for the over 50s extra cash opens up.

As for the extra money, you might as well sit on it until the ISA limits go up. At least then you'd have a buffer before needing to dip into precious ISA money once you've started it.