ISA newbie

Fugitive

I'm looking to save some money - say £3k in an ISA but retain the ability to access my money in the event of a rainy day. I *think* from reading on here that what I am looking for is a cash ISA - am I right ?

If so, is the a & l offer still the best one or is there a better one out there now ?

Are you limited in how long the money stays in, are there penalties for moving it ?

Thanks in anticipation.

Kazza242

A mini cash ISA is always the best place to start saving, especially if you are a tax payer.

A number of new mini cash ISA accounts have been mentioned in this thread. Click here.

I'm not a fan of the A&L ISA because if you decide to transfer your A&L isa to another provider at a later date, they will charge you £25. In light of this charge, I don't think the ISA is worth it.

For more info on current mini cash isa's, you could look at the Moneyfacts website, click here or the MoneySupermarket site, here.

Are you limited in how long the money stays in, are there penalties for moving it?

As mentioned above, with A&L there is a penalty should you wish to move to another provider later on. The A&L ISA is not a fixed rate product, so there is no limit on how long the money must stay in the account, but be aware of the transfer charge.

Fugitive

Thanks for the help and the links. I've applied for a mini-cash ISA from First Direct and I intend transferring the money in October to whatever's good at that time

lipidicman

You mention a 'rainy day' - remember what is withdrawn cant be put back in. ie pay in £1000 and withdraw £500, then you can only pay in another £2000 (total deposit =£3000 balance = £2500) So it might be better to have a separate rainy day account. It is also better to wait to deposit money if you will need some of it soon (ie dont bung £3000 in then realise you need some for a holiday - plan, hold that money back and pay it in later in the year)

Of course, this only matters if you are in a position to fill the ISA each year!

lipidicman

Paul_Varjak wrote:

I think it also worth considering a one-year regular saver account at this time of year and add £250 each month. Halifax have such a savings product paying 7.07% (5.656% after tax). When the one year is up, next April, you will have another £3,000 to invest in your mini-cash ISA next year.

Then, if Halifax still have their regular saver offer available, just open another regular saver account and start the process again.

I do just this - the money that sweeps out is perfect for your ISA!

BTW you dont have to open another account - the £3000 plus interest is swept out and the standing orders just keep going in (so the manager told me). And you get the newest rate - ie going up from 6% to 7% for me

ED

BTW you dont have to open another account - the £3000 plus interest is swept out and the standing orders just keep going in (so the manager told me).

It's true, this is confirmed (in small print) at the base of the annual statement, provided the customer didn't specify an "end date" for the account. (There was an option for this on the form, so some people may have ticked it, but wish they hadn't.)

Online statements indicate the account has successfully rolled-on, with SO deposits for March + April.

lipidicman

I am a little worried as my account show £3250 in there - I hope that the £3000 and the interest will sweep out and leave the £250 in there. This happened because the SO date is early in the month, but the opening and therefore anniversary date is near the end of the month! I will let you know

ED

lipidicman - fear not, your experience virtually matches what happened to a member of my family. On 1st March this year, £250 went in, later that day the £3,000 (12 deposits of £250) + annual interest were transferred by Halifax to the Web Saver account, leaving the March '05 deposit in Regular Saver.

lipidicman

Fantastic, dont you just love this place!

Much better than going into Halifax to try to get an answer!