I have simple needs, what is the best ISA for me?

kkid

• The account will be used mainly to store emergency money when I go to university in September if, for example, my finance is delayed and I need to pay rent.
• I want to be able to pay in cash to a branch
• As money may be needed in an emergency, I need access to it 24/7 but will not be withdrawing regularly.
• I can pay in regularly, but not very much, only a couple hundred per month.
• I want the highest interest possible (Obviously)
• The opening balance will be about £2500

What is the best ISA to suit my needs?
If it helps, I live in Lichfield at the moment but will be moving to Liverpool in September (Hopefully)

innovate

No ISA, or other savings account, will be your best bet.

Look at current accounts- Lloyds/BoS Vantage, Santander 123, Nationwide FlexDirect.

As has been mentioned elsewhere in threads you started, if your income is below the personal allowance, you can fill in an R85 to get your interest tax free.

kkid

innovate wrote: »

No ISA, or other savings account, will be your best bet.

Look at current accounts- Lloyds/BoS Vantage, Santander 123, Nationwide FlexDirect.

As has been mentioned elsewhere in threads you started, if your income is below the personal allowance, you can fill in an R85 to get your interest tax free.

Oh, so ISAs are really there to people who have exceeded their tax-free allowance but want a little extra money in savings to be tax free too?

Therefore, all of my accounts, no matter what they are, will essentially have the same benefits of an ISA (Being tax-free) because of only having a tiny income as a student but may also benefit from higher interest rates and/or other features such as debit cards etc...?


My biggest problem with many of those is that I cannot pay in the money that they want each month. You mentioned the Santander 123 account, this wants £500 per month. You also mentioned the FlexDirect account, this wants £1000 per month.


What is my best bet for something along the lines of £200 per month?

kkid

Even Though you said not to do ISAs, I have been looking at the Nationwide Flexclusive ISA (http://www.nationwide.co.uk/savings/cash_isa/flexclusive_isa/default.htm)

This gives a 2.25% AER interest rate. The catch is that it is only available to current nationwide customers. Therefore I had an idea. Would it be possible to set up one of their free no interest FlexAccounts (http://www.nationwide.co.uk/current_account/compare-accounts/default.htm) to make me an existing customer and then open up this ISA for interest?

There is a condition that the FlexAccount must have had £750+ for three months paid into it before the ISA can be opened (I assume to prove you're a real customer). Would I be able to do this with my current savings and then withdraw most of it from the FlexAccount and put it into the Flexclusive ISA after 3 months?

I essentially go without interest for three months but then get a 2.25% ISA rate afterwards?


Is this a sensible idea or complete crap?

AndyPK

You can shuffle part of your 2500 around once per month to meet the 500/1000 requirements.

Nationwide would be a good account to start with.

AndyPK

It's half correct.

Open a current account with them. If you open the one recommended flex direct you can get that isa straight away. Which is what I have done.
The current account earns much more than the Isa so the only time you should consider putting money in there is march or when you have more than 2500. Even then another current account is a better bet.

innovate

kkid wrote: »

Oh, so ISAs are really there to people who have exceeded their tax-free allowance but want a little extra money in savings to be tax free too?

Almost.....in normal times, cash ISA savings pay better interest that anything else. But we aren't in normal times right now, and we have the bizarre reality that some current accounts pay better interest than a cash ISA, even for basic rate tax payers.

However, over the years, people can build up big cash ISA balances if they max their annual allowances. This could be very handy later in life, when/if they need to pay more tax.

In your situation, saving in one of the current accounts for now seems to make more sense for now. You can still drop the lot into an ISA just before the end of the tax year, if you feel you want to make use of your current financial year's ISA allowance.

kkid wrote: »

What is my best bet for something along the lines of £200 per month?

5 times £200 makes £1,000, if you get my drift? No term says you must deposit the amount in one go.

innovate

AndyPK wrote: »

Nationwide would be a good account to start with.

Their FlexDirect looks the best option for the OP to me. Since the OP already has an HSBC current account, they can nicely shuttle money between these two accounts - - - e.g. shuff the entire £2.5K from HSBC in FlexDirect. Then once a month, send £1K from FD to HSBC and back. Job done.

Fill in an R85 to get 5% AER.

Review the situation

1. next March - - - do you want to get any of your money into an ISA, using the 2013/14 allowance?
2. in 12 months time, when the FlexDirect interest plummets to 1% (which is still better than the 0% you'd get at HSBC by then)

kkid

innovate wrote: »

5 times £200 makes £1,000, if you get my drift? No term says you must deposit the amount in one go.

Its £1000 per month, not £1000 altogether.


I can't afford to keep that account.

kkid

AndyPK wrote: »

It's half correct.

Open a current account with them. If you open the one recommended flex direct you can get that isa straight away. Which is what I have done.
The current account earns much more than the Isa so the only time you should consider putting money in there is march or when you have more than 2500. Even then another current account is a better bet.

I would love to do this. The 5% is an amazing rate, the best I've seen, I just don't have £1000 every month.

kkid

innovate wrote: »

Their FlexDirect looks the best option for the OP to me. Since the OP already has an HSBC current account, they can nicely shuttle money between these two accounts - - - e.g. shuff the entire £2.5K from HSBC in FlexDirect. Then once a month, send £1K from FD to HSBC and back. Job done.

Fill in an R85 to get 5% AER.

Review the situation

1. next March - - - do you want to get any of your money into an ISA, using the 2013/14 allowance?
2. in 12 months time, when the FlexDirect interest plummets to 1% (which is still better than the 0% you'd get at HSBC by then)

Sorry about the multiple posts, just saw your post and ti may change everything I have been commenting about.

I can just send the £1000 to and from accounts each month and as far as the banks are concerned, I am paying them £1000 continuously? :eek:

Surely this can't be true, branks must be too smart to not notice this.