MSE News: Savings loophole allows under-35s to earn 5%

lui

ok if i put in £5000 pound to start and add £300 per month therafter does the tax on the interest still work out better than a 3% ISA?
Could anyone tell me what the interest actually works out at after being taxed?

i would have £10 000 in an ISA to start ond £500 a month there after until it was full if this makes any difference to the working out?

meaning i would now have £5000 in my ISA and £200 a month going in to that on top of this deal.

thanks for any replies

finder

lui wrote: »

ok if i put in £5000 pound to start and add £300 per month therafter does the tax on the interest still work out better than a 3% ISA?
Could anyone tell me what the interest actually works out at after being taxed?

Assuming you are a basic rate tax payer and single [ that is, your yearly salary for 2010/11 is less than (£37400 + £6,475) ] your saving interest will be taxed at a 20% rate. Therefore you would be getting 4% net/year interest from your Santander's savings against 3% net from the ISA.

Regards

savemoney

graciela_peterson :spam: Reported spammer

lui

finder wrote: »

Assuming you are a basic rate tax payer and single [ that is, your yearly salary for 2010/11 is less than (£37400 + £6,475) ] your saving interest will be taxed at a 20% rate. Therefore you would be getting 4% net/year interest from your Santander's savings against 3% net from the ISA.

Regards

Thanks for your help with that i think it sounds pretty promising! im not sure weather to go for a fixed rate ISA now it would make sense as i am saving for a house so it would also keep me from spending my money. any thoughts?

finder

lui wrote: »

Thanks for your help with that i think it sounds pretty promising! im not sure weather to go for a fixed rate ISA now it would make sense as i am saving for a house so it would also keep me from spending my money. any thoughts?

Not a problem. If you found my post useful you should click on the thanks button underneath it; that way it will push my counter up which is always a good thing!

As for your post it really depends on you. Roughly, £5000 at 4% will give you £200 net per year in the Santander account (which you can close anytime in the future should you need the money). £5000 at 3%in your ISA will give you £150 per year. So, I know what I would do but everybody is different!

One thing you should bear in mind is that you should always put some money away in an instant access account for a rainy day so that you don't have to resort to your long term savings when an unforseen and big payment needs to be made.

Regards

Zekko

Hi, new poster here.

Just a cautionary note that I'm sure most of you are aware of anyway.

I opened one of these accounts 2 weeks ago. The advisor gave me a full printout of the Terms & Conditions of this First Home Saver Account, and one thing that isn't made particularly obvious on the website is that the Standing Order has to be paid into your account monthly, between 5th-21st of each calendar month to qualify for the 5% interest.

I will double check the dates on the T&C's when I get home from work, but I distinctly remember there being a short time window to make payments into the account to qualify for the 5% interest.

antispam246

Opened one today, was very straight forward, atleast for me. Thr printout of the t+c's on mine state the SO/DD to be paid between 2nd and 21st of every month.

The advisor said I could transfer the initial deposit online into my account, which I just did. Obviously i'll have to phone to verify it got there at some point. I was transferring from A&L account and was told to use the same acc no./sort code as previously mentioned for the SO/DD payments, along wth my account number as a reference.

So
09-00-00
00050005
Then my first home saver account no. as the reference. Money cleared from A&L immediately, so fingers crossed.

Renewable

Hello - I went into a Santander branch in Corby 2 weeks ago, in order to apply for this account, and was told by all of the employees there that the account did not exist, and that it never did. I was even invited into a room for an interview with a mortgage advisor, who thought I was a complete idiot and explained that 5% savings were impossible and that I was wrong. I then tried to apply online and all I get is the 'page unavailable' notice. Does the account still exist? Has anyone managed to apply for one recently?

Many thanks.

Wraggy

Renewable wrote: »

Hello - I went into a Santander branch in Corby 2 weeks ago, in order to apply for this account, and was told by all of the employees there that the account did not exist, and that it never did. I was even invited into a room for an interview with a mortgage advisor, who thought I was a complete idiot and explained that 5% savings were impossible and that I was wrong. I then tried to apply online and all I get is the 'page unavailable' notice. Does the account still exist? Has anyone managed to apply for one recently?

Many thanks.

You cannot apply online, that is why it won't work for you (I don't know why there is even an option to apply online to be honest). I suggest you print the page off on the internet and show it to them in your branch to prove it exists http://www.santander.co.uk/csgs/Satellite?appID=abbey.internet.Abbeycom&canal=CABBEYCOM&cid=1210611105334&empr=Abbeycom&leng=en_GB&pagename=Abbeycom%2FPage%2FWC_ACOM_TemplateB2
Ask them to look on their system because then they will find it, even if they don't personally know about it. When I applied, I got the impression the account was quite uncommon to open, and hence why the staff might not know about it.

housesitter

housesitter wrote: »

Has anyone paid in a large sum (30K+) and had their account closed? Or indeed still going a few months later ?

This thread is over 10 months old now.

Has anyone actually paid more than the initial £5000 into their account and if so, is it still open??

Someone must have done this, if so please respond!