Non tax payer - ISA worthwhile?

bundly

Sounds good, I will look into that! Thanks everyone.

jennifernil

If you do open the Halifax Reward account, you can then qualify for 3.2% rather than 3% interest on their ISA Direct 4 account.

bundly

Thanks everyone.

I also need someone to check that I am doing the maffs right, when I try to work out if it's worth the hassle of switching.

If I invest 3 x £7k = £21 in the Vantage account, at 4% per annum, is that £840 a year interest? And I'd withdraw that monthly, £70 a month? Is that correct?

So then I have to weigh up how much cash I'd make if I leave the £21k in the NW @ 3.5% that is £735 per annum, ir £61.25 a month.

So it seems I'd gain £8.75 a month by switching. However, dont i have to take into account that with the NW, unlike th Vantage, I can leave the interest in the account and that interest will also attract 3.5%. Is that not better?

Pls excuse ignorance and replies in Janet and John fashion please :-)


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oldfella

it averages £68.77 per month, the rate you get is 3.93%

you are quite right, you need to move the interest somewhere because you wont receive interest over £7000

maybe open an instant access savings account and move it there each month, you should get about 3% with Nationwide

edinburgher

it averages £68.77 per month, the rate you get is 3.93%

you are quite right, you need to move the interest somewhere because you wont receive interest over £7000

maybe open an instant access savings account and move it there each month, you should get about 3% with Nationwide

Alternatively - if you can open three Vantage accounts you can put £6666.66 in each, leave the interest in the accounts until they're maxed (about 5 months?) and then have any further interest withdrawn and recycled into a regular saver or the like? First Direct and Lloyds are still offering 8%/5% respectively on these I believe?

bundly

Hey Edinburgher -- that's veering well off Janet and John territory LOL but wow someone is offering 8%???? That came right out of left field! So why don't I just syphon off one of my lump sum savings accounts by making regular SO payments into one of these high interest accounts? Or am I missing something?

I am so daft that I accidentally paid my Council Tax twice every month for the whole of last year without once realising it, and the bill I just received shows that not only do I have nothing to pay this year, the council owes ME £335. So I could pay the £122 I expected to pay in CT into a regualr savings account. I will now go to First Direct and Lloyds and check those rates - wow!

edinburgher

It might not be suitable for you, as they ask for your 'salary' of £1500 to be paid into their current account each month before you can qualify. There's some discussion over whether this has to be a salary or any monthly payment in this thread:

https://forums.moneysavingexpert.com/discussion/comment/42052108#Comment_42052108

The Lloyds regular saver is a similar deal (i.e. you need to have a current account with them and pay a fixed monthly amount into it). A couple of things to consider:

1) Regular savers only allow you to save a fixed amount (i.e. £100-250 a month over 12 months) and are then converted into accounts with much lower interest rates. You'd be advised to withdraw the money at this point

2) The suggestions that people have made could potentially see you trying to open 3-4 different current accounts. As you're not employed in the typical sense you may struggle to do so, as your affordability etc. won't look very good and several applications within a short space of time will look bad on your credit report. If you do decide to act on peoples' suggestions, it might be an idea to make the applications within a *very* short space of time (i.e. directly after each other), before the CRAs have a chance to register the searches.

bundly

Thank you Edin for going to all the trouble of finding those links and warning me about my credit record -- wise advice indeed.

Yes with both I have to switch my current account and pay in "a salary or income" of £1500 every month. I could indeed do that by taking that amount from my savings each month, but then of course I'd have to spend from that account as well, or the 1500s will be accumulating in an account that pays nil interest.

I don't want to do anything TOO complicated, I'll just confuse myself.

There seems to be a CATCH to all these high rates!

oldfella

the Lloyds RS has reduced to 2%, worth watching because it was 5% a while ago, the First Direct RS requires you to have a current account with them which charges £10 per month, this is avoidable but you need to read the rules carefully.

edinburgher

the Lloyds RS has reduced to 2%, worth watching because it was 5% a while ago

Ah - sorry for the dud tip - my fiancee opened an account a mere 3 months ago and is on the 5% rate. Then again, I shouldn't be surprised that a bank has stopped offering a generous rate, it's not as if they like to make life easy for us!