Isa Or Savings Account

gord1976

Hi
I have a small amount of money to invest and i have read on this site that ISA's are the best way to save, however i have noticed that Lloyds offer 8% over 2 years and the ISA's are usually around 5%.
So if you were investing £3000 is it best to take out an ISA or put the money in Lloyds for 2 years ? I understand ISA's are tax free, but i don't know which to choose and how to work it out !!
Thanks in anticipation !!!

Mikeyorks

Read some of the stuff on the main site first. This (under Savings & Investments ... see links on left hand side of this page) is a good start? :

http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1103213261,45760,

si1503

The lloyds account is a reg saver, so you'd have to feed in a certain amount of money to it each month.

The ISA however you can dump all £3k into right away, and is of course, tax-free.

For simplicity I'd go with the ISA, certainly considering you have not already used your ISA allowance up for this current tax-year, and due to the fact that they might be getting abolished soon, it is therefore wise to make use of them whilst you can!

If you have the time you could go the reg saver route, but you'd want to drip feed your lloyds current account (which feeds the reg saver) from an easy access savings account if you want to maximise the return.

ksrao

Hi, Si1503 who told you that they are going to abolish ISA? I thought GB gave the opposit message in his prebudget speech.

si1503

ksrao, you are quite right, they should be around beyond 2010 now. However whether or not they are around much longer than that who knows!

ksrao

Well, I have joined a PEPS when introduced by the previous government.Even though Peps abolished by this government I just kept Peps as it was and going strongly. I only hope same thing will happen to ISA.

Mikeyorks

si1503 wrote:

ksrao, you are quite right, they should be around beyond 2010 now. However whether or not they are around much longer than that who knows!

Extract from the Pre-Budget Report 2006 :

In order to build on the success of the ISA, the Government has announced that it will make the ISA a permanent feature of the savings landscape.

A fresh Government doesn't necessarily have to stand by that. But they'd be pretty stupid not to - in the light of their success as a Savings vehicle .. and when contemplating the ever increasing tide of debt on the other side of the personal balance sheet.

jamesd

A future government might notice that they are undermining pension investing for retirement if trends from here -suggesting ISA instead of pension except for what an employer will match - continue. That could threaten them. Not a significant concern for those investing today, though.