Please explain ISA to me

mboro

I want to save money with RBS they have suggested I open up an ISA and put in £25 per month .their interest rate is 4% is this good ?

I have no idea how an ISA works ?:o

Mr_Mumble

Pay off debt before saving.

Joe_Bloggs

It is a crappy rate of no significance in your circumstances. Do not let this issue deflect you from paying your debts. The coucil tax is a crown debt. Do not get into their bad books for non payment of council tax. Have you tried the citizens advice bureau for financial advice regarding your debts ?
J_B.

mboro

Debts are all in hand and are being paid off monthly with the advice and help of CCCS meaning I have £300 left to live on and save.

EDIT..I have updated my siggy.

jimclark1967

You're still better off putting any spare cash towards paying off the debts earlier if the interest rate is more than about 4%

What is the interest rate on your "online finance" for example?

JC

Milarky

For £25 per month (and up to £250 per month in months when you have extra to save) you can currently get 6% (lot better than 4%) in the Scarborough Building Society 'my savings'.

cheerfulcat

mboro wrote:

I want to save money with RBS they have suggested I open up an ISA and put in £25 per month .their interest rate is 4% is this good ?

I have no idea how an ISA works ?:o

Hello, mboro,

That rate, as others have said, is pretty poor. You can compare rates at moneysupermarket.com.

ISAs are tax-free deposit or stock market-based accounts - there is a fuller account here. Put simply, you are allowed to save ( cash ) or invest ( shares ) a certain amount in a special account ( ISA ) every year. Previous years' contributions and any gain they have made continue to roll up tax free. Nothing in the ISA has to be declared to the taxman. The ISA scheme replaced the more generous PEPs and TESSAs of the previous government - there is no guarantee that it will continue beyond 2010 ( but it is guaranteed until then ).

HTH

Cheerfulcat