Help Needed for a youngster

Hi there,


I am 16, and i started full time work about 2-3 months ago. Because i am 16 i am no out goings so there for money in the bank. I dont want to spend this money but invest it and make some money for my self, i have always wanted to be sucesful and by using the money i have now i understand that i can build and build on this and one day be as sucesful as i wish to be.

I was looking at mini cash ISA's. I would be able to put £60 a week in to eventually make it up to the usualy maximum of £3000. But me been young limits me into what i can do with my money, so far that is the only thing i can think of.

Now for your help :) : What else can i invest my money into. What are the best ISA's out there for the highest interest earnt?

Sorry if this does not make sense, i am only young so i dont really understand the technical side.

Thanks
Tom Wiseman
«1345

Comments

  • TomsMom
    TomsMom Posts: 4,251
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    Hi Tom

    Looks like you're living up to your name!

    An ISA is a good first move. Definitely use up your £3,000 allowance (it goes up next year) and get your interest tax free. For ISAs you can do no better than check out this thread http://forums.moneysavingexpert.com/showthread.html?t=401374


    If you go to moneysupermarket.com or similar sites (moneyfacts.co.uk is one) by doing some research you will find some accounts you might find suitable. On a quick search I found these:

    HSBC do an online saver and you can open one at 16 years of age. It pays 6.25% AER, 6.08% gross.

    Bradford & Bingley do an account for 13-25 year olds called Smart Save paying 6.15% AER/gross,Includes a bonus of .50% if you make no more than 3 withdrawals per year. Branch based.

    Harpenden Building Society do an account called 18 Club - you can't withdraw until your 18th birthday. 6.19% AER, 6.10% gross. Branch/Post.

    If you want a regular monthly saver Yorkshire Building Society does one paying 7.1% gross (including conditional bonus) but I can't find a minimum age. This is branch based but you can open by post and once opened you can do BACS transfers if you don't live near a branch (or send a cheque) and you can register to view the account online.

    Yorkshire BS also do a Freedom account for 12-20 year olds, 6.15% AER, 6.06% gross.

    Also check out the Halifax. They do a Monthly Young Saver which pays 6.55% gross including the bonus.

    Bear in mind that I've quoted gross interest not net interest. Some accounts have conditions attached for bonus rates, check these out as if make more withdrawals than allowed you lose the bonus.

    Check them out. Go to the sites like moneysupermarket.com and just start looking through the accounts to see what they offer and whether you are eligible. I didn't realise that so many accounts had a minimum age of 18.

    This is just a start and I'm sure someone else will be along with other suggestions.

    Good luck.
  • Thanks very much. Really good of you!

    Yeah i would love to live upto my name, its there so i may aswell use it wisely!

    Theres just so many i choose from. Really is, not so much a tuff desicision, but a pain looking through all the different one when i don't have a clue what all these terms mean.

    My mother used to work for a bank so if i can drag her away from what she is doing, i will get her to help me make my choise. Before i do sign up though, i will post what i am going for and then you guys can maybe have a look for me?

    Thanks
    Tom
  • Hi there,
    I have signed upto HSBC savers account with the 6.03% gross interest.

    Now i have signed upto that is it posible to sign upto an ISA as well.
    Or am i going savings mad??

    Tom
  • TomsMom
    TomsMom Posts: 4,251
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    Hi Tom

    AER - annual equivalent rate - same as compound interest - your mum should be able to explain that to you but it's basically if you leave it in and leave the interest in as well then next time you get interest on the interest, if you see what I mean. Sometimes AER and Gross are the same.

    GROSS - before tax (you get gross interest if you do not have to pay tax)

    NET - after tax - unless you are exempt from tax (in which case you fill in a form R85 and give to your bank/building society) then the bank will take the tax off and just add the net interest. However, it will tell you both the gross and net figures for your information.

    Glad to see you've got started. Now you've got your HSBC account there's nothing stopping you getting an ISA. This is really the best form of saving. You know you can put £3,000 a year into it, this goes up to £3,600 next year. This is completely tax free so go for one with the highest interest rate and make this your main saving account, especially if you don't want to withdraw it. You can withdraw if you want to but you can't replace it. Say you'd got the maximum £3,000 in. You can withdraw any amount but because you'd used this year's allowance you cannot put it back. But you can put more in from the start of the next financial year.

    Don't forget to check out the thread on ISAs I highlighted in my original message, the best paying ISAs on in there.

    Nice to see someone so young interested in saving, you'll go far :T . Just remember to keep some for yourself and have some fun too ;) . And congratulations to your mum for bringing up such a sensible lad.
  • Ha! Good of you to get back mate. And thanks i will pass on the message to my mum. I have always wanted to be sucessful, and with my dad owning his own business and me working there already. I almost have a future in the business unless something serious happens. And when i do one da take it over, thats where i will look into shares of other major business's, and maybe even property, i would love to go into property one day. I know if the timing is correct in property you can make good money. But also it works the other way.

    Thanks for your help again. I think i will open an ISA as well. May as well put away some money before i have any out goings, and then its there for the future if i ever need it.

    Thanks
    Tom
  • Hi again

    Just some help with interest. The Net interest for the HSBC is: 4.86% That gets put in every month. Does it work like this:

    First month i put in £320

    Interest: 4.86%

    Total interest: £15

    Does the next month then have £335 that wil gain interest??

    Also. i am setting up a standing order. Of 320 a Month. If i put that in before the interest is calculated will i get interest on that sum as well as the money put in the previous month? Or does the money have to have been in for so long??

    I know its worded complicated Sorry :(

    Thanks
    Tom
  • TomsMom
    TomsMom Posts: 4,251
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    Just some help with interest. The Net interest for the HSBC is: 4.86% That gets put in every month. Does it work like this:

    First month i put in £320

    Interest: 4.86%

    Total interest: £15

    Does the next month then have £335 that wil gain interest??

    Yup.
    Also. i am setting up a standing order. Of 320 a Month. If i put that in before the interest is calculated will i get interest on that sum as well as the money put in the previous month? Or does the money have to have been in for so long??

    You should get interest on the total. There shouldn't be any restrictions on how long the money should be in for.

    However, don't take my word for it as I don't have an HSBC account. Check the terms and conditions for the account you have. Also, as your mum used to work in a bank she may know.

    I reckon your gonna be like Richard Branson. Don't forget to post when you've made your first million ;)
  • Crabman
    Crabman Posts: 9,943
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    Hey Tom, any reason you went for the HSBC one? ICICI's HiSAVE* account is the current best payer (see the article) with a whopping 6.3% interest paid monthly. No need for an agreement or minimum payment to the account - just deposit what you can when you want and interest is calculated daily (btw looks like that's how the HSBC account works too with daily calculated interest!)

    You're doing really well for a 16 yr old btw! :T :beer:

    Crabman :D

    *- this link helps the site - click here for details on how the site is funded.
  • oliveoyl
    oliveoyl Posts: 3,372
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    Hang on a sec.... the interest payment won't be £15 a month on £320, it'll be about £1.30 @ 4.86% net.
    TOP MONEYSAVING TIP

    Make your own Pot Noodles using a flower pot, sawdust and some old shoe laces. Pour in boiling water, stir then allow to stand for two minutes before taking one mouthful, and throwing away. Just like the real thing!
  • TomsMom
    TomsMom Posts: 4,251
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    Crabman wrote: »
    Hey Tom, any reason you went for the HSBC one? ICICI's HiSAVE* account is the current best payer (see the article) with a whopping 6.3% interest paid monthly.
    Crabman :D

    You need to be 18 to open ICICI's HiSave account. Tom is only 16.
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