Mini-ISA . What does it really mean to my money?

rfeenie

Hello

I've gone through quite a few pages on this forum getting information on mini-ISAs.
Tonight I've signed up to the Egg 6.05% one and deposited the maximum of £3000

Could someone give me an example of how my money will mature over say 3 years if a) I put in the max. £3000 each year and b) The rate remains at 6.05%

eg.

Year 2007 Interest
£3000

Year 2008
£3000 in + matured £3k from 2007

Year 2009
£3000 in + matured £6k from 2007 & 2008


Thanks guys

Rob

Milarky

£3000 x ((1.0605^3) - 1)/(0.0605) = £9555.48

(assuming rate stays the same)

rfeenie

Thanks for the reply Malarky.

That mark up on my £9000 seems a bit low when compared with the £3000 that Martin shows at the bottom of his example here:

http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1077487692,12362,

If I can make £550 over £3 years in Martins example where its only putting in £1k year then why is my £3k so low on the returns?

What gives??

exel1966

You've mis-read it as the example shown is £3K over 3 years giving a return of £550.

InMyDreams

rfeenie wrote: »

What gives??

Martin has calculated the return after three years of sticking one lot of £3000 into an ISA. After 3 years it will have grown to £3552.86. (3000*1.058^3)

Not sure what Milarky has done, but I make the total after three years at 6.05%, if you put £3k in to start and £3k at the start of years 2 and 3, £10133.59, which would include £9K plus £1133.59 interest.
IMD x

kingmonkey

Milarky has answered correctly for the question asked.

but with the 3rd £3000 matured then you will have £10133.59

InMyDreams

Just to add, work it out as follows…
Start of year 1: put in £3k
End of year 1: £3K*1.0605 = £3181.50
Add another £3K to bring total balance to £6181.50
End of year 2: £6181.50*1.0605= £6555.48
Add another £3K to bring total balance to £9555.48
End of year 3: £9555.48*1.0605= £10133.59

Etc…

InMyDreams

kingmonkey wrote: »

Milarky has answered correctly for the question asked.

but with the 3rd £3000 matured then you will have £10133.59

doh, yes, I see it

rfeenie

Ahh that seems more like it, thanks for the detailed replies folks!