Vantage and ISA monthly explanation

mike_pl

Hi.
I've read few post about ISA and llods Vantage..
could somebody give me examples of interest from both from 3.000 pound?
how does ISA actually work and Vantage?
do I have to keep that 3000 in Vantage whole month to qualify ?
and how about ISA how and whet the interest is added?
thanks a lot and sorry if it sound dumb

Kohoutek

Lloyds TSB Vantage is a current account that pays interest of 3.14% net on balances over £5,000 but not on any balance exceeding £7,000. You have to pay in £1,000 every month (e.g. salary from employment) to qualify.

It's not an ISA. An ISA in a type of savings account where any interest is not subject to income tax. However, there are not many ISAs that pay interest of more than around 3%, so despite the tax advantages, many people choose to save in Lloyds Vantage accounts instead because the interest after tax is still very good.

psychic_teabag

For short-term savings, it makes sense to save anywhere that gives the best net rate. But for long-term savings, there may be a benefit in making full use of your ISA allowance, since that should lock in tax-free savings forever (or until the govt. changes its mind), whereas once Lloyds drop the interest rate, it's just another account.

One tactic is to keep the money at the highest net rate (eg a regular saver) until near the end of the tax year, then move it across to an ISA to lock in the tax-free status long-term.