Is it worth me getting a ISA?

andyblack

Good evening to all,

Been a long time lurker and signed up a few days back but have a question for you all so i hope you can help.

At present i bank with Natwest never had any issues with them i have both a current and instant access savings account.

The have asked me a number of times if i would like to open a ISA but have always declined. But now im trying to look into it more seems to be so full of information is can burn me out.

I would only be able to pay around £10 to £20 per week into a ISA would it be worth it or should i just stick with my instant access savings account?

ani*fan

Go for the one with the highest rate of interest, the interest on an ISA is tax free so will always beat a regular savings account. ISAs are also instant access so no problem getting to your money should you need it. They'll open an ISA for you in 10 minutes, easy.

Hope that helps.

p00hsticks

ani*fan wrote: »

Go for the one with the highest rate of interest, the interest on an ISA is tax free so will always beat a regular savings account. ISAs are also instant access so no problem getting to your money should you need it. They'll open an ISA for you in 10 minutes, easy.

Hope that helps.

but these days, the interest on a regular savings account is almost always beaten by a good current account (e.g. Club Lloyds, Santander 123........)

OP- the Nat West ISA only pays 0.75% tax free for the first £25k, so you can do better than both their ISA and their savings account (currently paying 0.5% less tax ? ).

If you compare ISA rates with non-ISA rates, you need to remember to look at the NET (tax paid) rate for the non-ISA accounts - if you're a basic rate tax payer you can work this out by multiplying the gross AER by 0.8

knack92

I would personally open a TSB Classic Plus current account and treat it as a savings account. Ok you don't get tax free interest but you do get 5% interest on the first £2000 in the account which is far better than any cash ISA rate.

I'd also consider moving the money in your instant access savings to one of these TSB accounts (you can have two) or another interest paying current account.

You will need to pay £500 into the account every month in order to get the interest but this can go in and out again straight away.

ceredigion

ani*fan wrote: »

Go for the one with the highest rate of interest, the interest on an ISA is tax free so will always beat a regular savings account. ISAs are also instant access so no problem getting to your money should you need it. They'll open an ISA for you in 10 minutes, easy.

Hope that helps.

:eek:
Scream loudly.

Archi_Bald

knack92 is spot on. The best suggestion by a mile.

Archi_Bald

ani*fan wrote: »

Hope that helps.

How would it help, and whom?

Lansdowne

andyblack wrote: »

I would only be able to pay around £10 to £20 per week into a ISA would it be worth it or should i just stick with my instant access savings account?

That comes to no more than £1000 in a year: a nice sum but the tax you would be saving by going for an ISA would be about £2 in that year. Given the time taken to research and open an ISA, would that be worth the effort?

andyblack

Lansdowne wrote: »

That comes to no more than £1000 in a year: a nice sum but the tax you would be saving by going for an ISA would be about £2 in that year. Given the time taken to research and open an ISA, would that be worth the effort?

This has been my thinking the entire time low amount of saving but i do hope to increase it over time to save more and more.

Zanderman

ani*fan wrote: »

Go for the one with the highest rate of interest, the interest on an ISA is tax free so will always beat a regular savings account. ISAs are also instant access so no problem getting to your money should you need it. They'll open an ISA for you in 10 minutes, easy.

Hope that helps.

Er, no it doesn't help, as your advice is entirely incorrect!

Being tax-free doesn't make ISA interest better - as all ISA interest rates are currently pathetically poor.

ISA interest rates are outshone by the many interest-paying current accounts available, even though those are taxed. Opening one of those, and just using it for savings, is the best option for small savers.

Advising someone with less than £1000 in savings to take an ISA is really bad advice. TSB Plus, Nationwide FlexDirect, Tesco (to name a few) all give much better rates.

And many ISAs are NOT instant access either - the best ISA rates are for those with withdrawal restrictions - so that part of your advice is wrong too.