mini ISA, not an easy decision

houmie

It is not only hard to find the right provider but also the way of how to invest the money.

1) Monthly payment of £250 / annually interest payment of 7.5% / £30 fee transfer to a different provider

2) Monthly payment of £250 / monthly interest payment 4.27%

3) Get £3000 from one or more 0% credit cards and invest it at one in a mini isa with an annually interest payment / and pay off the loan with £250.

Is a monthly interest payment better than annually (Option 2)? Because of interest upon interest saving? Is it worth to go with the highest interest, but having a quitter fee? But who guarantees that their offer for next year is still that good?

Any comments?
Houmie

jimclark1967

houmie wrote:

1) Monthly payment of £250 / annually interest payment of 7.5% / £30 fee transfer to a different provider

Which provider is this?

houmie wrote:

2) Monthly payment of £250 / monthly interest payment 4.27%

There are far better rates available - check Martin's ISA article

houmie wrote:

3) Get £3000 from one or more 0% credit cards and invest it at one in a mini isa with an annually interest payment / and pay off the loan with £250.

Saving a £3000 lump sum for 12 months will earn far more interest than £250 a month. You'd have to make the minimum payments on the credit card and make sure you don't have to withdraw the ISA cash to pay them off.

houmie wrote:

Is a monthly interest payment better than annually (Option 2)? Because of interest upon interest saving?

So long as you're comparing AERs then it makes no difference

houmie wrote:

Is it worth to go with the highest interest, but having a quitter fee?

This depends on the amount saved, the interest rate and the transfer fee. For example, a £25 fee on £3000 you would need a rate more than 0.8% better than a fee free provider (over 12 months)

houmie wrote:

But who guarantees that their offer for next year is still that good?

No-one

grumbler

houmie wrote:

1) Monthly payment of £250 / annually interest payment of 7.5% / £30 fee transfer to a different provider

For Portman ISA read this THREAD and follow the link to the other thread inside.

3) Get £3000 from one or more 0% credit cards and invest it at one in a mini isa with an annually interest payment / and pay off the loan with £250

This is the best option. However you need card that offers SBT (super balance transfer) option to do this. Only a few cards (Egg, Virgin) offer this.

houmie

Thanks for your comments guys.

@Jim

It is http://www.portman.co.uk provider with 7.5% interests.
Look at the bottom (Regular Saver ISA)
http://www.portman.co.uk/public/savings/05products/savings_account_detail.asp?Type=1

The quitter fee is £30 though. Is it still ok because of the high interest?

@grumbler

Excellent. Good to know I would need a Virgin or Egg. What is the site for Egg? Which one is better for my cause? May I get a loan of 3000 with 28.000 salary?

Thanks
Houmie

grumbler

houmie wrote:

What is the site for Egg? Which one is better for my cause? May I get a loan of 3000 with 28.000 salary?

http://new.egg.com
You can get even higher credit limit with £28K salary. However, income is important, but not the only factor. The others are:
Do you have any credit history and other debts?
How long are you at your current address?
Are you on the electoral roll?
.......
.......

Nobody can tell you in advance. Just apply for a card and you will see...

houmie

HI grumbler,

Thanks for the tips.

1) I have read your other posts about Portman. You are right, it seems it is a trap and not really worth it.I guess you would recommend Abbey to me right?

2) Regarding the credit card, I can't find the (super balance transfer) option in the benefits of Virgin or Egg Green card. How can I make sure they offer that to me? And now lets say I have the credit card, how do I proceed? Can I just make this super balance transfer online to my current account and go e.g. to Abbey to open a mini ISA?

Thanks
Houmie

grumbler

houmie wrote:

... Portman. You are right, it seems it is a trap and not really worth it.I guess you would recommend Abbey to me right?

I am not sure about a trap, but I don't like transfer charges. Fo me this charge indicates that interest rate is likely to drop in future or not to rise in line with the base rate. I cannot recommend anything. I have chosen FD ISA with intention to transfer it somewhere in October. I still am not sure that the game is worth a candle... I also prefer to keep money on easy-access and regular saving accounts during a financial year and then use my ISA allowance at the end of the year. By doing this I do risk not lose my yearly allowance in case of emergency .

houmie wrote:

Regarding the credit card, I can't find the (super balance transfer) option in the benefits of Virgin or Egg Green card. How can I make sure they offer that to me? And now lets say I have the credit card, how do I proceed? Can I just make this super balance transfer online to my current account and go e.g. to Abbey to open a mini ISA?

Read CREDIT CARDS section and 'What is a Super Balance Transfer?' article in particular. Also read and search CREDIT CARDS board. SBT is just transfer of your overdraft debt (even imaginable, that does not exist in reality) to a credit card.

houmie

grumbler wrote:

SBT is just transfer of your overdraft debt (even imaginable, that does not exist in reality) to a credit card.

I see. e.g. how is it with the Egg credit card? Can I just log in online and do this balance transfer to my current account? Or do I have to call them> Because some guys did it online with Virgin. I feel uneasy when I have to explain her I had a overdraft which isn't true. I am a bad liar. ;o)

cheers
Houmie

grumbler

I do not have Egg card, but I am 100% sure that you can do this online. If you cannot find this option just ask question on the CREDIT CARDS board. It is time for you to start reading this board too!