ISA v Savings account

edmundo_100

Hi

I have a question which I have seen Martin has addressed with regards to his article on the fountain savings method being Mini Cash ISA to Regular Savings Account to Normal Savings Account.

I find that my saving is very hit and miss I save then I spend it (generally before the year is up) for this purpose I want to save and I want to see monthly interest with an account that has no penalties for taking out my money when I want it. Is an ISA still the best way to go and if so can one be recommended with these terms? If not with these terms thats grand I will settle for a normal mini cash ISA and learn to save!

My partner an I have just opened a joint account from which we will save £150 each (she to a credit union account and I to an existing ISA I have used for saving) we also want to be saving bewtween 500 to 1000 a month what is my exact plan and why??????

Would be so grateful for some feedback.

Thanks a million

isofa

ISAs are always the best first bet for up to 3K of any cash you have, because it's tax free savings.

Many ISAs are instant access, but you cannot put in more than 3K a year, and if you put in say 3K, then take out 1K, that's it, you cannot then add another 1K to it, even though the balance is now a 2K!

Have a look at https://www.moneysupermarket.com for the best ISAs with instant access.

edmundo_100

OK so I put that money into my ISA no matterey what, currently I have found a Bradford & Bingley 6.4% return saver account, what your saying is I wont beat this?

What about the taking money in and out when you like if I do this he I wont get interest as I wont be leaving it untouched for the year where as the saving account pays monthly?

isofa

You won't beat it if you are a tax payer, because ISAs are gross interest (you keep the lot), everything else, providing you are at least a basic rate tax payer is taxed, so your 6.4% gross turns into 5.21% net at the minimum.

Obviously you only get interest on money in the account, but even if interest is paid yearly, it is still calculated normally on the balance daily, but paid either monthly or yearly depending on the account chosen.