savings advise please

lfcarethebest

i currently have a halifax regualr saver, entering £250 per month. I am wondering that if by the time 6 months have passed and i have £1500 in the account, i will have around £3000. Should i invest this in to an isa with the best interest and close the regualr saver, and then set up the regualr saver again and take £250 a month from this account to maximise the return?

another question how much interest would i get after closing the saver down with £1500

also what would the numerical difference be with me moving the money to an isa and then drip feeding a regualr saver - i.e how much interest.

thanks in advance for any help

shaun

Paul_Varjak

The computations to work all that out would be horrendous, and you provide insufficient information to do it anyway!

For most people I think the following 'strategy' is a good one (I am really ignoring your complicated question):

1. Put in £3,000 into a cash ISA NOW (assuming you have funds)
2. Open up a Halifax Regular Saver NOW and put in £250/month.
3. In a year's time, when Regular Saver matures, repeat from step 1 until Halifax Regular Saver or ISAs are no longer available!

grumbler

Welcome
Why don't you just read T&C?

Halifax Regular Saver

Although you cannot make withdrawals from your Halifax Regular Saver, if you do need access to your money you can close your account at any time. If you close we will pay interest up to the date of closure at the rate for the Halifax Web Saver (no card) account (currently 4.9%).

Besides, with Halifax Regular Saver you have 5.6% after tax (20%). I doubt that you can find easy-access ISA that pays you more.

Usually you do not need full £3000 to invest into ISA. However, using ISA to drip-feed Regular Saver is not a good idea as you lose you £3000 yearly allowance.

Conclusion: wait until Regular Saver matures and only then invest £3000 into cash ISA. If you have some extra money earlier you can invest it into ISA as soon as you have it.

P.S. Now I see that my advice slightly differs from Paul’s one. However, I think that I am right as I took into account that you already have Regular Saver. This means that it matures before the end of the tax year and you can invest all resulting £3000 (or part) into 2005/06 cash ISA.

Paul_Varjak

I agree with grumbler to some extent, though he has made some assumptions.

The Regular Saver does pay over 5.6% but that does assume you are a basic are taxpayer. If you are a higher rate taxpayer it is nearer 4.2%.

Secondly, do you drip feed the Regular Saver from your income or from other savings that are earning less than you could in an ISA?

Thirdly, grumbler has assumed that you are wanting to feed the Regular Saver from your ISA. I am not sure if that is what you are saying, though that is one interpretation can be put on it. But I agree with grumbler that feeding a Regular Saver from an ISA is a bad idea.

Grumbler's conclusion is also suspect if you only started the Regular Saver this tax year, since your regular saver would not mature until next year - that may mean missing out on your ISA allowance this tax year.

lfcarethebest

i am not a taxpayer. I was wondering what to do in 4 months time when i will have the £3000? ive heard about putting in to some kind of savings account (not an isa) and then feeding a regualr saver agian to maximise interest but im not too sure about this????

thanks shaun

newsmonkey

lfcarethebest wrote:

i am not a taxpayer. I was wondering what to do in 4 months time when i will have the £3000? ive heard about putting in to some kind of savings account (not an isa) and then feeding a regualr saver agian to maximise interest but im not too sure about this????

Are you likely to become a taxpayer at any point in the next year or two? If so, I'd reckon stuffing the matured regular saver cash into an ISA would be your best bet.

If that's not the case, I heard the Halifax Regular Saver rolls on to the next year, so you can keep the cash in there, add more per month, and you'll be earning interest on the first year stuff and the new payments. Can someone confirm if this is correct?

grumbler

As above: if you are not a taxpayer you do not need ISA unless you are likely to become a taxpayer in the future.

lfcarethebest wrote:

... ive heard about putting in to some kind of savings account (not an isa) and then feeding a regualr saver agian to maximise interest but im not too sure about this????

Read [URL=http://]SAVINGS [/URL] section and ‘Regularly Beat the Best Savings Accounts’ article in particular.
A&L Online Saver with 5.35% is believed to be the best easy-access saving account now.

Paul_Varjak

newsmonkey wrote:

I heard the Halifax Regular Saver rolls on to the next year, so you can keep the cash in there, add more per month, and you'll be earning interest on the first year stuff and the new payments. Can someone confirm if this is correct?

The Halifax Regular Saver does not 'roll on'. It ends after one year and pays out to the account you decided to pay it to when you opened the account.

Paul_Varjak

lfcarethebest wrote:

i am not a taxpayer. I was wondering what to do in 4 months time when i will have the £3000? ive heard about putting in to some kind of savings account (not an isa) and then feeding a regualr saver agian to maximise interest but im not too sure about this????

thanks shaun

If you are not a taxpayer but will be leaving money in an account after you become a taxpayer then an ISA is a good idea but, again, the calculations of exactly when to do this are complex in the scenario you describe.

You can effectively feed the Halifax Regular Saver account from, say, the Halifax Websaver Account (4.9%) by having automatic transfers from the Websaver account to a Halifax Current account on one day each month. On the subsequent day, transfer from the Current Account to the Regular Saver account.

The ideal scenario would be to have £3,000 to put in an ISA NOW and then open a Regular Saver NOW and drip feed it with £250 each month from other savings (or income) each month. Then, after one year, the Regular Saver account would end and would transfer its funds to your websaver account (or whatever). You wouyld take £3,000 from this account and put into another ISA or the ISA that you opened in the previous tax year. You keep repeating this until either ISAs end or Halifax stop Regular Savers.

This is what I have started doing from this tax year!