Savings/investment questions - options?

bingobangobongo

I am hoping someone will be able to give me some investment/savings advice for my currents savings - I am thinking
of moving some money about to try and maximise the monthly interest earned.

Currently I have:

-Just over 50k in a savings account, the bonus rate has ran out and I think the interest rate is now 2.46% and it gets me about £75 a month in interest.

-I have a barclays Golden ISA (issue 2), the money was transferred in from the previous ISA on 28/05/2010 and then I topped it up to the new limit of £5100 on the 02/06/2010. Its just a cash ISA and I am getting about £15 a month now in interest.

I recently switched my current account to santander to avail of the £100 offer and the 0% zero fee credit card (and hopefully the zero debit card too given time).

They mentioned about different savings options like Investment ISA, and some other savings I think with government bonds etc, but I really dont know anything about this and I am hoping someone here can give me some initial advice before I decide what to do.


Basically:
1. Can I open a new Investment ISA with 10k considering that I have already a cash ISA started from May last year?

2. Should I just stick a lump sum in their esaver (issue 2) at 2.75% which is higher than my current savings?

3. What are the other options availble to me (they mentioned low, medium and high risk)?

4. If the answers to 3 are suitable, will I have to lock my money away for x amount of time or could I access it if I needed it (e.g. to buy a house)?

5. Am I missing anything I should have asked!?


Hope this all makes sense and thanks for any pointers or info!

Lokolo

1. No, S&S have a limit of £10,200 minus anything in Cash ISA, as you have used cash ISA of £5,100, you only have £5,100 left in S&S (£10,200 - £5,100) allowance.

2. Good idea for now. It's easy access which means you can move the money once you have a more informed opinion.

3. Investments they are talking about. Do you want to tie up any amount of money? Investments are longterm, talking of 5+ years. If not, then stay away.

4. Opps, already answered. I don't know the specifics of the investments available so can't say if they definately tie you up. But if you're not willing to tie the amount up for a long period, then as above, don't think about investing.

https://forums.moneysavingexpert.com/discussion/3005456

See above, this person had his for 3 years and took it back out as soon as it regained value (as it had lost over the shorterm). The OP could have made more money back if they had kept it. These shorterm bumps are usually overriden by longterm gains.

5. Yes, you haven't mentioned anything about yourself in other financial areas; children, pension, house (mortgage), age. These should all be looked at when dealing with your finances.

bingobangobongo

In relation to 5. - I am married, no kids, early 30's, mortage on base rate so quite low. Considered paying off mortgage but I feel I could earn more in interest than I would gain by paying off a lump sum. I also like the security of having savings should we ever need them for anything.

They want me to make an appointment with the Investments and savings expert in santander - I just want to get as much info as possible on all the options before I go in. They even mentioned something that could earn 13% - and I'm pretty sure she said you could take the money out whenever...sounds too good. Investment may not be for me then.

In terms of an S&S ISA - I guess I could start a new one now with £5100? What % do they earn? I could then top it up to £10200 in April 6th? And have 2 different ISAs in two different banks?

Thanks again

Lokolo

Basically the woman in Satander could put the investments inside a S&S wrapper. S&S ISAs aren't the things that earn the money, it's just a "wrapper" where you put investments inside. So, for example, one of the things you can put in S&S ISAs are funds. Fund A could go up 50%, Fund B could go up 10%, Fund C could go down 40% (so -40% return). You choose the Funds to go in it.

With Santander, you would choose a portfolio.

http://www.santander.co.uk/csgs/Satellite?appID=abbey.internet.Abbeycom&c=Page&canal=CABBEYCOM&cid=1210610577378&empr=Abbeycom&leng=en_GB&pagename=Abbeycom%2FPage%2FWC_ACOM_TemplateB2

You can see here they have 5 portfolios; Bond, Cautious, Balance, International and Global. Each increase in risk.

Here is the Global one:

http://www.digitallook.com/cgi-bin/dlmedia/security.cgi?action=prices&csi=1935395&username=&ac=

You can see that over 1 month, the value has decreased 0.55%. So if you invested in it a month ago, then took money out today, you would have 0.55% less than what you started with.

The return is not guaranteed, so even though the saleswoman stated 13%, you won't neccessarily get that.

Lokolo

http://www.trustnet.com/Factsheets/Factsheet.aspx?fundcode=E3FP9&univ=U

This is the global one again but with more information.

You can see between 2-3 years it has lost a lot of money! But over other periods it has had gains.

You can also compare the performance against the benchmark, which it pretty much follows, doesn't tend to beat it, which is what you want in an investment.

---

IF you do want to invest (which can have the power to return greater %s), then you should really go and see an IFA. But remember, investments are there for the longterm, not shorterm.

bingobangobongo

OK I think I see what you mean. So I could only invest £5100 in this S&S ISA with Funds.

But I can also do it outside of an ISA too>?

I tried to use the website you provided to check the bond, cautious etc but they seem to have went up over the past few months..I will have to look more into this.

I'm sure the santander expert would be helpful - I just want to get a picture of my options before I make another visit

dunstonh

But I can also do it outside of an ISA too>?

The ISA is just one of a few tax wrappers. You can hold investments in the ISA tax wrapper or other tax wrappers or not in any tax wrappers. Yo just need to pick the right taxwrappers (or unwrapped) to suit your financial and tax needs.

I'm sure the santander expert would be helpful

Thats an oxymoron.

Lokolo

bingobangobongo wrote: »

OK I think I see what you mean. So I could only invest £5100 in this S&S ISA with Funds.

But I can also do it outside of an ISA too>?

I tried to use the website you provided to check the bond, cautious etc but they seem to have went up over the past few months..I will have to look more into this.

I'm sure the santander expert would be helpful - I just want to get a picture of my options before I make another visit

Yes basically. But as Dunston says, investments can be in other wrappers, such as pensions.

Yep, a lot of funds have gone up over the past year. I've made around 40% over 3 years of investing, although at one point I was at -20%. (this is just from "gambling", trying to learn myself, so the amounts I have put in are quite low!)

bingobangobongo

Why would you not put some money in an ISA tax wrapper? The tax wrapper basically protects you from paying tax on the money right?

Lokolo

bingobangobongo wrote: »

Why would you not put some money in an ISA tax wrapper? The tax wrapper basically protects you from paying tax on the money right?

You wouldn't do it on purpose. You may use up your allowance and still have money left over, you may not know about it or some other bizarre reason

bingobangobongo

ok thanks this is proving to be most helpful.

Another question: I see that on this site, The Flexible ISA (issue 3) from Santander is a "best buy".

Could I then move all my money from my current ISA (e.g 5190 which includes the interest earned in the past year) to this ISA in santander and ALSO top it up by £5100 as investment ISA?

Ahh - just answered my own question: "The downside here is it's only for new ISA money; you can't transfer old cash ISAs into it, so if that's what you're after check the other top picks."

But I could still put £5100 in as a new investment ISA in santander, then in April 6th can I close my barclays ISA and then add in £5100 into the santander one (so that its not a transfer but 'new' money)?

Tis' mighty confusin'!