How much can you save?

Rose_Crow

Just been thinking about this. The idea for me was to use the ISA to save up a deposit for a house. However, if I can't ever withdraw money without losing the ISA's tax free benefits, what's the point in puting money in it?

I'm confused

LucyTheDwarf

Ultimately, once you withdraw the money, you lose the tax benefits. But then again, you've spent the savings, so that's not going to be a problem - you can't be taxed on interest you're not earning!

It took me a while to get my head around it, but even if you're only saving for the short term, you'll get more interest than in a normal savings account (unless it's very high rate - the current darling of the savings world, Kaupthing Edge's 6.5% is beaten by any ISAs paying more than 5.2% for basic rate taxpayers, and 3.9% for higher rate taxpayers).

jenjade

hi guys when i am debt free should be october i would love to join you guys. i am overpaying my debts and keeping a little back for saving but i pay no interest on my debt. i was wondering what savings accounts are best i would like on online saver with good interest? i have one with hsbc but it is rubbish! very low interest. thanks and good luck to you all fab thread jen

LucyTheDwarf

Hey jenjade! We'd love you to join us. Seeing as your debt is at 0% (I'm in the same situation - £1000 on credit card, 0% ends in November), you may as well just pay the minimum on that, and save what you would have paid off your debts with - that way you'll earn interest on that money, and as soon as your 0% expires, you pay it off with the savings!

As far as savings accounts go - I can recommend Kaupthing Edge - currently one of the best buys (I think Birmingham Midshires has 0.01% higher, but K.E. has a rate guarantee...). Use up your ISA allowance first though. Seeing as you bank with HSBC, you qualify for their ISA, which has a none too shabby rate of 6.25% AER.

moneysavingwannabe

Ooh,

I have a HSBC ISA, not kept up with the interest rate, so it's not that bad then. :j I've got all my savings in ISAs with them so rather chuffed.

Going back to the savings in ISA thing. I have nearly enough to pay off my 0% cc (£14000) but have chosen to put in ISAs cos I get monthly interest and when I need to pay the cc I will withdraw it all, but I won't be able to fill the ISA allowance in the same financial year, so it would have been wasted anyway!

Hope that makes sense. I know some people say not to relinquish the ISA and keep moving the debt around but it's got to be paid off sometime and credit is getting harder to get for a long term!

LucyTheDwarf

moneysavingwannabe wrote: »

Ooh,

I have a HSBC ISA, not kept up with the interest rate, so it's not that bad then. :j I've got all my savings in ISAs with them so rather chuffed.

Not necessarily. Their "Cash ISA" isn't as good as their "Cash e-ISA", rate wise. It pays to keep your eyes peeled with HSBC.
With anyone, in fact.

Grats on having everything worked out though

moneysavingwannabe

Hmmm,

Oh well get about £50 a month interest so could be worse!

Can't move it now cos filled this years allowance. Will look into it if I ever have any money ever again! (Once this debt is paid have another 0% cc to pay for the wedding.) :eek: Another year to pay that off!

LucyTheDwarf

Loving your positive attitude

When is/was your wedding? Congratulations :T

moneysavingwannabe

Hi,

The wedding is in July so not long now! Still lots to organise/spend unfortunately. :rotfl:

Thankyou! :beer:

paulboy83

Moneysavingwannabe, you can move the isa once you have added to it.

As I understand it (and I know someone will make sure I am corrected if i'm wrong;) ) You can transfer money between isas at any point but you can only add to one isa (with new money) each tax year. So you can not add to another isa now but if you have fully subscribed to the HSBC isa this year you could move it to an isa paying a higher rate.