In regards to saving whilst getting the most interest back?!

jinkssick

I basically want an account which I can keep on saving but also making some money on whats actually there. Abbey national are a joke and 23p a year on interest is a joke. With a little researching I found that Internet only account Icici bank UK pays out a 5.15% AER with their HiSave account.

Or is there any other way. I would be looking to invest slowly about 150 a month and so on?

any help and advice would be thankful. thanks

F_T_Buyer

Why don't you get a 'drip feed' regular savings account?

Abbey National do one, along with the Halifax.

£25 to £250 a month for 12 months @ 7% interest. They are others buy you have to have current accounts with them.

masonic

If you have £500 to transfer in and out of their Premier Current account, A&L's 12% regular saver is pretty hard to ignore. This would work well as a supplement to holding the bulk of your savings with, say, ICICI (5.15%) or Birmingham midshires (5.2%).

humfer

Whole load of opportunities here. Firstly make sure you have used up your ISA allowance where you can get around 5.3% tax free on £3k. Then look at regular saver accounts - theres load around ranging from the likes of 7% Halifax account to others like 8% LLoyds (2 years) and 12% (yes 12%!!!) A&L which require you to have a current account with them. With the rest dump it in either ICICI or I think Birmingham Midshires now has an internet account at 5.2%.

jinkssick

Thank so much for the advice and with your help worked out a strategy to gain some free cash.

Abbey is my middle man with Icici bank being my MAIN savings account. 5.15% is being paid where I will take out each month a lump sum of £250 which will be paid into the 12% AER account of A&L. 12 months x 250 = 3k which is there limit for a year. without taxes applied 3,000 x 12% will get me

£3,720

£720 for free. not too bad. at the end of the year move the money BACK to Icici bank to gain interest on whats on their and the new amount. Then renew the A&L account and do the same process again.

shud be worth the effort. thanks for the advice guys. got me set savings wise for the next 5 or so.

ManAtHome

Strategy sounds good, but you need to re-check the calculations - £3k for an entire year even at 20% would 'only' return £600...

I had one of the HSBC £250 a month at 8% last year - total interest was around £120 I think (average amount 6x£250=£1500@8%=£120 - you get slightly more, but near enough for an easy calculation).

So roughly if you started with £3k in ICICI and transferred your £250 a month to A&L, your interest should be £1500@12%=£180 plus £1500@5.15%=£77).

ps - LOL, edited after I re-checked the calculations and stopped taking tax off some of it...

jinkssick

thanks so let me get this. so if the whole amount £3,000 is paid with A&L at 12% then that would we then be £360 in a year, seeing as 3k is their yearly limit tax free.

plus whatevers on the Icici bank. So its not bad at all. thanks for the breakdown.

jinkssick

sorry forgot to ask....and what is the best ISA around to get the best interest?

can 2 people, me and my girlfriend, open an ISA account seperately seeing as 3k is the legal limit?! And is the payment a one -off payment or monthly?

Paul_Herring

jinkssick wrote:

sorry forgot to ask....and what is the best ISA around to get the best interest?

Look at best buy tables. Look for the AER figure. Always pay attention for 'intro' periods however, and move at the end of any intro.

You can move money between institutions once deposited. 'This' tax year's contributions must be moved all together, you may split up previous year's contributions.

You can hold previous year's contributions with one institution, and open 'this' year's with another. You cannot hold 'this' year's contributions with more than one institution. (It's illegal)

can 2 people, me and my girlfriend, open an ISA account seperately

Yes. But the money legally belongs to the person holding the account. (I'm assuming you will be supplying her with £3k - being somewhat pessamistic, should you split up, you cannot 'take' the money back)

seeing as 3k is the legal limit?! And is the payment a one -off payment or monthly?

You each have a £3k limit each tax year. You can pay either all of the £3k each April 6th (the first day of the tax year) or drip feed it during the year. Should you not use all of your £3k one year you cannot carry it forward to the next year.

And no - interest earned on previous contributions does not affect your £3k limit.

Paul_Herring

Sorry - missed this post

jinkssick wrote:

thanks so let me get this. so if the whole amount £3,000 is paid with A&L at 12% then that would we then be £360 in a year, seeing as 3k is their yearly limit tax free.

A&L's 12% regular saver is not a 'tax free' product per-se, it will only be tax free if the person holding the account doesn't pay income tax because they aren't earning. If you're earning, you'll be paying tax at 20% (assuming you're not a higher rate tax payer.) In addition, you cannot put the £3k in all at once, it must be drip fed at a maximum of £250 per month.

So, the calculation:

1st 250 gets 12/12 * 12% (full year)
2nd 250 gets 11/12 * 12% (11 months of interest)
3rd 250 gets 10/12* 12%
..
12th 250 gets 1/12 * 12%

So, total gross interest is
250 * (12+11+10...+1) * 12% =
250 * 72/12 * 12% =
£180

Minus tax:

£180 * 80% = £144

You can get a maximum of £144 from the A&L 12 RS.