Top Cash ISAs Discussion Area

bristolleedsfan

catlou wrote: »

Hi all

this may seem like an obvious/stupid question..........but can't seem to get my head round it at the mo!!

Is it best to have interest paid annually or monthly on a mini cash isa?

Barclays pay interest monthly which if added to the account creates a higher A.E.R than its advertised applied rate because interest is effectively earnt on interest tax free. ( Barclays quote both an applied annual rate and a A.E.R)

Most accounts pay interest annually which if added to the account results in the interest earning interest tax free, year on year.

If u choose ( if u are able to) to have interest paid monthly from accounts that normally have interest paid annually then the applied rate is usually a slightly lower rate than the advertised annual rate. ( opposite of Barclays example) and in these instances the interest would be paid to yourself and therefore not able to earn interest on interest tax free.

Any_Thing_For_A_Buck

Considering the ABBEY are offering an ISAs at 10% AER, I would have assumed :money: would have mentioned this?? It's the best rate around.

The only thing what concerns me is that you have to invest the same amount into a Guaranteed Growth Plan. What is this?? and How much can you save with this??

Also I thought the idea of an ISAs is to open it at the start of the tax year in order to receive the maxium saving. How much can you really save, opening an ISAs for 07/08 now.

Cheers

bristolleedsfan

Any_Thing_For_A_Buck wrote: »

How much can you really save, opening an ISAs for 07/08 now.

Cheers

Tax free interest on 3000.00 year on year + year on year tax free interest on the interest that the 2007/08 ISA produces.

Any_Thing_For_A_Buck

bristolleedsfan wrote: »

Tax free interest on 3000.00 year on year + year on year tax free interest on the interest that the 2007/08 ISA produces.

Apologises, I didn't make it clear.

IE: I open an ISAs with £3,000 yesterday how much interest would i have earnt considering the tax year finishies today. Surely it can't match that of an ISA opened up at the start of the 07/08 tax year

Crabman

Any_Thing_For_A_Buck wrote: »

Apologises, I didn't make it clear.

IE: I open an ISAs with £3,000 yesterday how much interest would i have earnt concerning the tax year finishies today. Surely it can't match that of an ISA opened up at the start of the 07/08 tax year

You'll only earn interest for the period the money was held in the account.

Interest earned on that balance won't match the interest that would have been earned had the money been placed into the ISA at the beginning of the 2007/8 tax year so you're right about that.

Frugaldom

I opened my first ISA a couple of years ago and have continued to use the same account, paying £3000 into it during year one, £3000 during year 2 etc. I was assuming that, as it is an ISA, I could just keep paying in the allowance each year to the same account (I like my instant access, monthly interest and no penalies for withdrawing).

Should I have opened new accounts at the end of each year?

Heinz

nykmedia wrote: »

I opened my first ISA a couple of years ago and have continued to use the same account, paying £3000 into it during year one, £3000 during year 2 etc. I was assuming that, as it is an ISA, I could just keep paying in the allowance each year to the same account (I like my instant access, monthly interest and no penalies for withdrawing).

Should I have opened new accounts at the end of each year?

No.

I move my ISA 'pot' if there's a better rate on offer with another provider.

6.5% appears to be the best at the moment. What rate are you getting?

harieta

I have one question.
How is the interest calculated on Mini cash ISA (Barclays).
I had paid in there (through past few months) £2000.
My interest was calculated at £10.01 (dated 7th April 2008)
I though it should be more as the interest rate I was given when I opened one was around 5% APR (can't remember exactly)
Is it right?

Frugaldom

Heinz wrote: »

No.

I move my ISA 'pot' if there's a better rate on offer with another provider.

6.5% appears to be the best at the moment. What rate are you getting?

My variable rate recently dropped to 5.35% and I know it isn't very competitive, but the account suits my needs. Anything extra goes into an ICICI 6.41% savings account and I'm a basic rate tax payer. I certainly won't put my 2008/9 allowance in there, but I haven't a clue where it will go. That's why I've been reading on here.

Bogof_Babe

Does anyone know whether the main comparison sites are showing f'08-09 interest rates or still showing last year's? Many of the linked providers have things like "last updated 1st March" under the Cash ISA interest rate details. Or do the rates tend to overlap financial years, rather than being reviewed at the start of a new one?