ISA or Regular Saver?

dannymccann

I have £3300 thats currently wallowing in a Barclays account at 0.83%, the girlfriend is in exact same position, but has £2400. We could just about afford £400 a month to save into it I think, so is it best to have a joint ISA and make the full use of £5100, or have 2 separate ISAs and save our own bit a month? Its going towards the wedding / house deposit.

Going on the information from the Saving section of the website, we want an ISA that is always accessible (in case we need a new car or something) and that can be managed online, cant be bothered with phone or post.

The calculator thing says 'for a Regular Saver to beat the Cash ISA it must get xx%', which the Barclays one for 4.25% does. So my question is, should I stick to the old rule of 'always fill the ISA up first' or just plump for the Reg Saver?

And what do we do with the money sitting in ISAs at the minute?

Cheers

McKneff

2 separate ISAs is the way to go, then you get twice the tax allowance.
Depends on your age but the allowance doestn go up to £5100 in April for people under 60. At the moment its £3600.

Just add your savings to the money you have in ISAs already. How much depends on whether yu have put these savings into ISAs this tax year or last.



Shop around in March to see if you can get a better interest rate.

dannymccann

I was thinking about waiting until the new tax year, do they have like 'new year sales' for ISAs?

McKneff

no not usually, if you wait till the new tax year you will lose your entitlement to this years (unlees you already have the £3,600 in there)
The sooner the better if you have space to put it in.

Like I say, you can shop around in March for a better rate, if there are some, just open a new one in April with a different provider and then transfer (always transfer) dont take money out to put into the new one.
regards

Mikeyorks

No such thing as a 'joint' ISA. The 'I' in ISA is to denote it's purely an Individual Savings Account.

If the 'wedding' etc is relatively imminent you may be better opting for a plain Savings account at the best rate available for 'easy access' (Probably the AA at 3.15%).

But you need to take into account that the best easy access ISA is around 2.5%. So as the 3.15% nets down to 2.52% if you pay tax at 20% ....... then there's really nothing in interest terms to choose between the 2 courses of action.

But - whichever you decide ....... I'd be moving / transferring from Barclays asap. A Regular Saver is normally only useful if you can work to the 12 months cycles these usually run at ....... as most have a significant penalty if you opt out part way through. But if you can work to that then a combination of Savings or ISA for the lump sum and Reg Saver for the £400 new money will be best.

Also consider that if you can work to a 12 month cycle - your £5700 might be best in a fixed term deposit (3.7% to 4%) for a year? Don't usually recommend moving funds from an ISA ..... but if you're going to blow it on a wedding ...... you really just look at the short term for it?