Need someone with a big brain, lol.

luke_pa

Hello i want to open an account with santander but am getting really confused, lol. Theres two ways i can go about this and i dont know which will give me more interest.

Option A

I have £3000 in my current account that needs to go into an ISA. I want to open a Santanter 1 year fixed rate ISA at 3.5 %. I can put last years allowance plus the £3000 thats in my current account which means i have £2640 left of my allowance which i want to drip feed at £200 per week. As i only have £3000 atm i cant open the instant access ISA 3.30% with santander (£2500 minimum opening balance) so will have to drip feed at £200 per week into my natwest ISA at 3.0%(where last years allowance is) until i reach £2500 then transfer to santander instant acess at 3.30%.

Option B

Open a Santander instant access ISA at 3.30% and put £2500 into it out of the £3000 pounds i have which means i have £500 left which i can put into a Santander 1 year fixed rate ISA at 3.50% along with last years allowance of £5340. and carry on drip feeding (at £200 per week) into the santander instant access at 3.30% until i reach this years limit.

I cant find a way of working out which option is better for interest gained.

Anyone with a huge brain and could help would be fantastic, lol.

Thanks

Luke

evenasus

You can only put 'new money' into ONE ISA per year.

badger09

luke_pa wrote: »

Hello i want to open an account with santander but am getting really confused, lol. Theres two ways i can go about this and i dont know which will give me more interest.

Option A

I have £3000 in my current account that needs to go into an ISA. I want to open a Santanter 1 year fixed rate ISA at 3.5 %. I can put last years allowance plus the £3000 thats in my current account which means i have £2640 left of my allowance which i want to drip feed at £200 per week. As i only have £3000 atm i cant open the instant access ISA 3.30% with santander (£2500 minimum opening balance) so will have to drip feed at £200 per week into my natwest ISA at 3.0%(where last years allowance is) until i reach £2500 then transfer to santander instant acess at 3.30%.

Option B

Open a Santander instant access ISA at 3.30% and put £2500 into it out of the £3000 pounds i have which means i have £500 left which i can put into a Santander 1 year fixed rate ISA at 3.50% along with last years allowance of £5340. and carry on drip feeding (at £200 per week) into the santander instant access at 3.30% until i reach this years limit.

I cant find a way of working out which option is better for interest gained.

Anyone with a huge brain and could help would be fantastic, lol.

Thanks

Luke

Not claiming to have a huge brain :rotfl:, but I can spot some flaws in your plans.

Both your options involve paying new money into 2 ISAs this year. but you can't do that :eek:

How about:
Open a Santander 3.5% 1 year fixed rate ISA but only to transfer in whatever you have in your previous years' ISA. Its not clear from what you say, whether you have the full £5340 in there?
And
Open a Santander Direct ISA 3.3% with the £3000 you have in your current account, then, when you have some spare cash, top it up to the £5640 limit.

OR
If you can really save £200 a week, it will only take you just over 13 weeks to save the rest of this year's alllowance, so you could open the 3.3% Direct ISA, transfer in last year's ISA, pay in £300, carry on paying in up to £5640 max, than in August, look around for a 1 year fixed rate where you can transfer the lot into

Phew:D.

McKneff

Big tip here, from a little brain.

Dont touch Santander with a barge pole.

luke_pa

Ok i didnt realise that i couldnt put new money in more than one a year.
I can do both of the 2 options youve listed so which one do you think will give me more interest?

Yes i have last years full amount of £5340 in my natwest e-isa.

Also the only reason im not going for more than one year fixed is because im hoping that the BOE basic rate will go up next year thus improving ISA interest rates and dont want to be stuck behind with a really crappy rate and be stuck with it.

badger09

luke_pa wrote: »

Ok i didnt realise that i couldnt put new money in more than one a year.
I can do both of the 2 options youve listed so which one do you think will give me more interest?

Yes i have last years full amount of £5340 in my natwest e-isa.

Can't say, because it depends on what rates might be available later in the year. Fixed rate = certainty, variable rate = flexibility. Your choice

cte1111

Can't you open the 3.5% ISA with the £3000 that you have, then drip feed the remaining amount in? Or am I missing something.... quite possibly!

luke_pa

Cant add money into a fixed rate once youve opened it i dont think.

luke_pa

Edited my post plus which option would you go for?

evenasus

cte1111 wrote: »

Can't you open the 3.5% ISA with the £3000 that you have, then drip feed the remaining amount in? Or am I missing something.... quite possibly!

The 3.5% Santander ISA is a fixed rate/term ISA so cannot drip feed.

badger09

luke_pa wrote: »

Edited my post plus which option would you go for?

My 1st option (transfer existing ISA into 1 year Fixed Rate etc) would give you an extra £10.68 by 5th April 2013 (£5340 x 0.2% difference between Direct & Fixed Rate ISAs) so probably not worth stressing about.

If you whack it all into a new 3.3% Direct ISA, you'll lose that £10.68 but will have much more flexibility if some better offers come up

Or you could use Cheshire BS or AA for your 'new money' only - both paying 3.5% and squeeze a bit extra that way