skim interest off 23,000 every month?

mr__tom_4

Hi just wonered if anyone has any good suggestions
i am not very clued up with savings accounts so any help appreciated

we have 23,000 and my wife is a non tax payer
we would like to be able to put this money into some kind of account
that will allow her to skim off the interest every month to give her a small income.

just wondered what accounts are best for doing this looked at ICICI
but not really sure how much interest it will pay AER? not sure how it is all calculated

or if anyone has any better ideas how this money could generate a monthly income

thanks

Mikeyorks

Try this link :-

http://www.moneysupermarket.com/Savings/Default.asp

.... tick the Savings Accounts box .... tick Easy Access .... and put in £23k. Then have a look at the Monthly Interest accounts it brings up - and it will also show the plain Interest rate?

Top one is FirstSave at 6.31% gross (variable) - which will give you circa £121pm Interest (gross). But you need to file an R85 (declaration of 'non taxpayer') to get the gross - otherwise they have to deduct 20% tax from the Interest.

FirstSave is new (Bank of Nigeria) ... but FSA regulated. Try one of the others if you're uncomfortable with that? And bear in mind - if you're using the interest every month and not allowing it to increase your capital / compound ... your money is effectively deflating by around 4% pa against RPI.

Later : read this re FirstSave

http://www.moneysavingexpert.com/savings/savings-accounts-best-interest#topaccounts

Steve_xx

I know you said that you wanted to take monthly interest. But it's appropriate to remind you that both you and your wife could invest upto £3000 each in a mini cash ISA in the current tax year. This money is then permanently shielded from the taxman, whether or not your wife is a taxpayer.

mr__tom_4

thanks for the help

just wondering what u mean about an ISA will protect them from
ta permanently and what is the maximum amout you can invest
in an ISA

Mikeyorks

The declared intent was :

we would like to be able to put this money into some kind of account
that will allow her to skim off the interest every month to give her a small income.

... putting it into ISAs doesn't appear to further that intent? But if you're looking more generally - read this first? As it covers options.

http://www.moneysavingexpert.com/savings/which-saving-account

LittleVoice

What Steve meant by "This money is then permanently shielded from the taxman, whether or not your wife is a taxpayer" is that, unless the rules are changed by the Chancellor at some point in the future, interest paid on cash ISAs is never liable to be taxed. This remains the case even if your wife becomes a tax payer in the future and therefore is permanent (subject to legislative changes).

Once the money is in the Cash ISA account as capital and is not removed (other than being transferred to another ISA), interest on it will never be taxed.

The £3000 is what each person can put in during the current tax year (to 5 April). From 6 April, the amount is £3,600 per year per person.

ryandj

In an ISA you could still wih draw the interest monthly as long as you kept the £3K capital in there at all times.

Mikeyorks

Relatively few ISAs which pay monthly interest .... and you're still losing the capital to inflation.

Lavendyr

Icesave, the current best-buy, pays monthly interest, though I agree with those above who say it's probably not the best option if you want to withdraw the interest.