£4000 to Save - ISA or Savings Account?

Moncs_2

Hi,

I have £4000 which I would like to invest, I have an ISA (CIS), and also a Internet Savings Account with Halifax (5.33% Gross)

I would like to put the £4000 somwehere which would gain me most interest over the next few years.

One thing I do want to do is move £75 per month from it to a bank in order to pay for a MCSE course I am doing. I have £2500 outstanding on the course and its it interest free.

So I thought rather than paying off the course and leaving myself with only £1500 to invest, I thought I would do it that way since the payments are interest free.

Any thoughts?

Kazza242

Moncs wrote: »

I have £4000 which I would like to invest, I have an ISA (CIS), and also a Internet Savings Account with Halifax (5.33% Gross)

I would like to put the £4000 somwehere which would gain me most interest over the next few years.

One thing I do want to do is move £75 per month from it to a bank in order to pay for a MCSE course I am doing. I have £2500 outstanding on the course and its it interest free.

So I thought rather than paying off the course and leaving myself with only £1500 to invest, I thought I would do it that way since the payments are interest free.

Any thoughts?

Hi,

I wouldn't put the money into any investments as I guess you'd only be stashing the money in the short term.

If you haven't used your mini cash ISA allowance yet, then you could put up to £3,000 into one now. Check out the following threads for the best Cash ISA options:

Mini Cash ISAs: The Best Currently Available List

The Best Mini Cash ISA Article Discussion Area

You could then put the remaining £1,000 into a high interest savings account. As you have accounts with Halifax already, the Sainsbury's Bank Internet Saver is a good option. It pays 6.25% interest and as Sainsbury's use Halifax as their clearing bank, transfers from Halifax to Sainsbury's arrive the same day. Transfers from Sainsbury's to Halifax arrive the following day.

isofa

Always use your ISA allowance up first, as it is tax free, so 3K (or whatever you have left in the allowance) into a top paying ISA as listed by Kazza above.

Then put the remainder into a high rates savings account!

Rules: ISA first, then high rate savings

cazbarfeatures

I had some money in a savings account and the Bank persuaded me to put it into a 5 year ISA. I really regret that decision because I am now in the position where I need the cash now and if I cashed in the ISA I wouldn't get all my money back. I have to wait until 2010 before I can withdraw it which seems like forever and get all my money back plus the interest.

I just wanted to advise you to make your decision carefully about where and how long you put your cash away for.

Moncs_2

Thanks everyone, the ISA that I currently have allows me to withdraw the money whenever I want without any penalties.

£3000 to the ISA and the other £1000 into the bank with the £75 monthly SO coming from it,

Thanks :beer:

luwpergwin

Remember a low interest rate cash ISA can sometimes be worse than a high interest paying bank account. Work out the AER's.

Aegis

luwpergwin wrote: »

Remember a low interest rate cash ISA can sometimes be worse than a high interest paying bank account. Work out the AER's.

True enough, but the best ISA will always outperform the best savings account, so it's always worth transferring rather than closing the ISA down.

MattB_4

luwpergwin wrote: »

Remember a low interest rate cash ISA can sometimes be worse than a high interest paying bank account. Work out the AER's.

Net rate surely?

Moncs_2

Aegis wrote: »

True enough, but the best ISA will always outperform the best savings account, so it's always worth transferring rather than closing the ISA down.

Its a CIS Mini ISA, dont know any more details than that.

Aegis

Find out the interest rate and the transfer-out penalties, and see how they compare to the market leaders, which you can find in the ISA subsection of this forum.

Moncs_2

Aegis wrote: »

Find out the interest rate and the transfer-out penalties, and see how they compare to the market leaders, which you can find in the ISA subsection of this forum.

Transfer out penalty? If you mean does it cost anything to withdraw money then no, there is no charge.

I did not think ISA's had set rates, I thought it depended on which market the money was invested in??