Isa Or Lloyds Monthly Saver

brindles01

Can someone please give me any useful advise as to which account would be better for returns out of A&L Direct ISA or Lloyds Monthly Saver? At present I have some money in the A&L account but I am thinking of opening a Lloyds account and investing the maximum £250 per month. But I am not very clued up on tax so I dont know if one is better than the other overall. Any advice would be appreciated. Thank you.

dancingfairy

It would help if we knew what the interst rates were on both of them. Also what sort of access you are looking for? cash mini ISA's are tax free but if you earned over the tax threshold in your job/ income from other investments you would have to pay tax on the interest received from the lloyds monthly saver.

Sillychuckie

Im not going to do the sums, but it depends if you are planning on saving long term, or the 2 years that the lloyds regular saver allows.
If you just want the absolute most out of your cash in the 2 years then the lloyds account will provide more money (even after paying tax).
BUT, if you are saving for the future it is worth using ur ISA allowance as the interest earned will remain tax free as long as it is in an ISA (which assuming the government keep them going, will eventually be of greater reward than a short term lloyds account).

brindles01

Thanks, Sillychuckie for your reply. I didn't want to get too technical with information because I really do want to make the maximum from my money in the short term, so I think the Lloyds account will do for me.

Sillychuckie

No problems..
Provided you use the maximum £250 allowance and try not to withdraw then you will definitely make more interest from that account than if you were to just lump a 3k sum into an ISA paying approx 5%.
The margin is increased further if you make use of the lloyds full 2 year span.

Lastly, as a tip... to make the most of your account and its time limit (2 years), do the following:

Open the account on or around about the 23rd-25th of the month.
Immediately pay in £500 (max initial deposit allowed) as well as pay in £250 using a standing order.
Once done, alter the standing order to pay on the first day of each month, and pay in another £250 on the start of the following month.
Within about 10 days, you'd have got £1000 in it and still be within the rules.
From that moment forward, just stick to the £250 at the start of the month via standing order.

JollyNolly

Sillychuckie, that's pure genius!! I'll be doing that towards the end of July, I think!!