Nationwide 2.5% Regular Saver ISA

le_loup

That's certainly as I see it.

innovate

Why would you want to put much into any cash ISA before March next year if you can get a lot higher interest in current accounts, and can move the lot into the 2.5% ISA (or may be an even better one) next March? I just don't get it

david78

Good point innovate. I am trying to utilise higher paying current accounts and monthly savers too.

Happychappy

Archi_Bald wrote: »

There are better regular savers about if it doesn't have to be an ISA. You can get £1,350 a month into 4 and 6% accounts, and another £500 at 3%. For non-tax payers (with R85s), this obviously beats any ISA, and basic rate tax payers and even higher rate tax payers also make more than in an ISA.

FD - 6% £300/mth
KRBS - 4% £400/mth
HSBC - 4% £250/mth
Club Lloyds - 4% £400/mth

The ISA, fully funded with £1,250 each month, would yield £202.36.

Making best use of the above with the same £15K, a BR tax payer would get £289.58 and a higher rate tax payer £217.48.

Verify my numbers: http://forums.moneysavingexpert.com/newreply.php?do=newreply&noquote=1&p=65165501

There is also Newcastle BS - 3% £500/mth.

The problem with some of the above accounts are such as the Kent Reliance, you need to go into branch to open one (380 miles) the FD you need to open a current account.

Thanks for the information and good spots, but are there any other regular savers which you can open online to try and eek an existence out of these paltry saving rates

marathonic

Happychappy wrote: »

the FD you need to open a current account.

If you switch your current account to First Direct and pay in £1,000 per month, at least initially, you will also get a reward of £100 on top of the best regular savings interest rate available today and a £250 interest-free overdraft.

zagfles

le_loup wrote: »

Further investigation shows that this is not a regular monthly saver at all!


No fixed amount each month (up to £1,250)
No deposit required each month
Withdrawal on demand
Rate reduces after one year


Sounds like an instant access ISA at 2.5% with a monthly maximum limit. Great!

Yes - looks good for people who just want temporary savings (eg for a holiday) and have no intention of using their full ISA allowance for long term savings.

Also to be pedantic the rate is 2.57%, the AER is 2.5% on the assumption that part of the year will be in a lower paying account, since the account isn't available for a full year.

zagfles

innovate wrote: »

Why would you want to put much into any cash ISA before March next year if you can get a lot higher interest in current accounts, and can move the lot into the 2.5% ISA (or may be an even better one) next March? I just don't get it

Because as I pointed out in another thread, a lot of people have high effective marginal tax rates due to stuff like child ben withdrawal, tax credits withdrawal, age allowance withdrawal, personal allowance withdrawal, perhaps even assessments for student finance for those with kids at uni (though not sure of the rules on this one). There's a lot of things other than income tax which use taxable income as the criteria, but ignore non taxable income eg in ISAs.

Besides even for a plain HRT payer, 2.57% tax free is equivalent to 4.28% taxed.

innovate

zagfles wrote: »

Yes - looks good for people who just want temporary savings (eg for a holiday) and have no intention of using their full ISA allowance for long term savings.

It looks a lot worse for the very vast majority of those people than a couple of good current accounts

innovate

zagfles wrote: »

Because as I pointed out in another thread, a lot of people have high effective marginal tax rates due to stuff like child ben withdrawal, tax credits withdrawal, age allowance withdrawal, personal allowance withdrawal, perhaps even assessments for student finance for those with kids at uni (though not sure of the rules on this one). There's a lot of things other than income tax which use taxable income as the criteria, but ignore non taxable income eg in ISAs.

You are using a tiny minority to try and create a picture for the vast majority of people.

ajdj

david78 wrote: »

Given this isn't really a monthly saver, and the fact that I can open/subscribe to two cash ISA accounts with Nationwide, can I do the following if I have the money to invest today:


(a) Open this Regular saver and pay £1250 today, and
(b) Open a Flexclusive ISA (1.75%) and pay £4,690 today


Then on 1st July:


(c) Pay £1250 to the regular saver ISA, and
(d) Pay £310 to the Flexclusive ISA


This assumes I can miss payments. The only payments I would make to the Regular saver are (a) and (c). Can someone check my maths too.


(I only want to save £7500 as cash this year as I am also paying £625 per month to a S&S ISA starting tomorrow).

Thanks, I didn't realise you could contribute to 2 different ISAs in the same year with Nationwide. For those of us with a Flexclusive issue 3 that pays 2.5% until end November, this looks like a good account to go for alongside it.