The Top Easy Access Savings Discussion Area

cheap_skate

Have been looking at a new savings account as I'm with Cahoot only paying 5.25% so would be daft not to opt for the 6.5% Kaupthing deal. I was just wondering if anybody new if the account paid the interest monthly as my Cahoot account does with would obviously make quite a difference to the overall comparison.
Also I was not sure about this part of the savings article :-

Inflation Beating Guarantee:

The rate at which prices increase is called inflation. NS&I, the government backed savings organisation, has Index Linked Savings offering to pay 1.35% more than inflation. Better still the inflation rate it uses is the Retail Prices Index (RPI) which is the higher measure, at 4.1%. This means it pays 5.45% overall.

A further bonus is these savings are totally tax-free, meaning that to get the same interest from another account, basic rate taxpayers would have to be earning 6.81%, and higher rate a huge 9.08%.

However, the cash must be left there for at least three years, and at least £100 must be deposited, so this isn't for someone who wants a short term place to save. And if inflation drops, its relative performance could drop too. Yet as it's guaranteed to be higher than inflation and tax free, at least you know your money will always grow quicker than prices will rise. Overall I'd say it's definitely worth considering as a place to put some of your cash.

Does this mean any money left in this bank for 3 years would not be liable for any tax in which case would make it even better than an isa ( if you were willing to leave it for 3 years).

If anybody can shed any light on this matter I would be most grateful.




:beer:

murphydavid

cheap_skate wrote: »

Have been looking at a new savings account as I'm with Cahoot only paying 5.25% so would be daft not to opt for the 6.5% Kaupthing deal. I was just wondering if anybody new if the account paid the interest monthly as my Cahoot account does with would obviously make quite a difference to the overall comparison.
Also I was not sure about this part of the savings article :-

Inflation Beating Guarantee:

The rate at which prices increase is called inflation. NS&I, the government backed savings organisation, has Index Linked Savings offering to pay 1.35% more than inflation. Better still the inflation rate it uses is the Retail Prices Index (RPI) which is the higher measure, at 4.1%. This means it pays 5.45% overall.

A further bonus is these savings are totally tax-free, meaning that to get the same interest from another account, basic rate taxpayers would have to be earning 6.81%, and higher rate a huge 9.08%.

However, the cash must be left there for at least three years, and at least £100 must be deposited, so this isn't for someone who wants a short term place to save. And if inflation drops, its relative performance could drop too. Yet as it's guaranteed to be higher than inflation and tax free, at least you know your money will always grow quicker than prices will rise. Overall I'd say it's definitely worth considering as a place to put some of your cash.

Does this mean any money left in this bank for 3 years would not be liable for any tax in which case would make it even better than an isa ( if you were willing to leave it for 3 years).

If anybody can shed any light on this matter I would be most grateful.




:beer:

First the AER that all savings providers are obliged to quote tells you the comparison. This makes the interval of paying the interest irrelavent as far as comparing interest is concerned as long as you use the AER and not any other interest rate quoted.

Second any ISA paying more than 5.45% AER will be better than the NS&I thingy so I think that the NS&I is only of value if you have already used up you ISA allowance for the year in question although as ever you have to watch the changing rates all the time.

Thats how I see it

Good choice moving from Cahoot. Why have you left it so long they have been pretty poor for ages.

Hope it is of some help.

Moggles_2

Originally Posted by cheap skate
I was just wondering if anybody new if the [Kaupthing Edge] account paid the interest monthly as my Cahoot account?

Yes, interest is paid monthly. (Monthly 6.31% gross/6.5% AER)
As noted above, it's the AER that counts for comparison purposes.

Note: minimum balance of £1000 required.

Anne56

Can anyone confirm whether I can have a £3000 limit in a Cash ISA in this tax year and have another £3000 in a separate Cash ISA for the upcoming tax year 6th April 2008-5th April 2009? In essence, can I have an ISA for each tax year?
Thanks
Anne Teggart

Mr._H_2

Anne56 wrote: »

Can anyone confirm whether I can have a £3000 limit in a Cash ISA in this tax year and have another £3000 in a separate Cash ISA for the upcoming tax year 6th April 2008-5th April 2009? In essence, can I have an ISA for each tax year?
Thanks
Anne Teggart

Yes, you can do this. In fact, next year you'll be able to put £3600 into a cash ISA as the allowance is going up.

You can have cash ISAs from as many different providers as you like, as long as the total funds added (excluding interest), across all the ISAs, in a single financial year does not exceed £3000 (£3600 from next financial year).

JimmyTheWig

How often should we be switching savings accounts?
My wife opened an ICICI account a couple of months ago as it was the suggested one in this article. Now it's not. Should we switch?

Mr._H_2

JimmyTheWig wrote: »

How often should we be switching savings accounts?
My wife opened an ICICI account a couple of months ago as it was the suggested one in this article. Now it's not. Should we switch?

That depends on how much you've got in there. Then you can work out how much interest you're "missing out" on by not switching, and then make a decision about whether or not it's worth you moving.

For example, I've got about £14,000 in ICEsave, paying 6.05%. I could move it to ICICI for 6.16% or Kaupthing for 6.5%.

With ICEsave I'm getting £847 interest per year before tax. With ICICI that would be £862.4, and with Kaupthing would be £910.

So, I'm "missing out" on £15.40 per year relative to ICICI and £63 per year relative to Kaupthing.

I have had an account with ICICI (still have it probably, never officially closed it) and wouldn't touch them with a barge pole - the number of times they don't calculate interest properly, coupled with other issues they have is enough to keep me away.

With Kaupthing I think the concern over whether or not they're going to go bust is not outweighed by the extra £63, so I'm staying away from them as well.

Other accounts with significantly higher interest rates than ICEsave have introductory bonuses that go away after a while, so again it's not worth it.

This is just an example of the process you need to go through. Look at how big your savings are and how much extra interest (in £ per year) you'll get elsewhere and make a decision based on that.

technolog

Hi,

I'm thinking of switching from ICICI to Kaupthing Edge but, surprise, surprise, I've got a few questions!

First of all, how the hell do you pronounce the damn name! Kowp thing? Kowp ting? Korp thing etc?

Where are the worries about them going bust stemming from?

Is the increased interest I'll earn enough to compensate for the interest I'll lose whilst the money is in transit from ICICI to my current account and then the interval between transferring from my current account and it starting to earn interest in Kaupthing Edge? I am right in thinking there is a period (3-4 days) that you won't be earning interest when money is transferring between accounts aren't I? Another bank rip off!

Cheers.

Moggles_2

Originally Posted by technolog
How the hell do you pronounce the damn name! Kowp thing? Kowp ting? Korp thing etc?

Right first time. It's pronounced Kowp thing.

Moggles_2

Originally Posted by technolog
I am right in thinking there is a period (3-4 days) that you won't be earning interest when money is transferring between accounts aren't I? Another bank rip off!

Well, you could wait until 27 May 2008, if it bothers you that much