Northern Rock vs. Stocks and Shares ISA?

sho_me_da_money

Serious beginner here guys.

Ive been paying attention to Northern Rock and they have this fixed bond account 6.9% until next year.

Should i just load my money into that or would i make a better return from a stocks and shares ISA?

Doesnt neccassarily have to be either - if theres a better way to make a good return, im all ears.

Thanks,

Aegis

sho_me_da_money wrote: »

Serious beginner here guys.

Ive been paying attention to Northern Rock and they have this fixed bond account 6.9% until next year.

Should i just load my money into that or would i make a better return from a stocks and shares ISA?

Doesnt neccassarily have to be either - if theres a better way to make a good return, im all ears.

Thanks,

What you make from a stocks and shares ISA is entirely dependent on what you invest in. If the underlying assets of your ISA perform well, then your ISA will perform well, and vice versa.

sho_me_da_money

Thanks for the reply Aegis.

So basically you wouldnt recommend me taking out a stocks and share ISA as im an utter beginner and have no idea what sticks are good and bad?

I might just stick to that 1 year fixed bond with Northern Rock.

Aegis

sho_me_da_money wrote: »

Thanks for the reply Aegis.

You're welcome

So basically you wouldnt recommend me taking out a stocks and share ISA as im an utter beginner and have no idea what sticks are good and bad?

Not quite... I wouldn't recommend that you just dive in and start chucking your money at random stocks. With a little research you can get a feel for some of the safer investment strategies. These certainly have the potential to outperform cash in the long run, but you'd still be looking at a 5 year time scale to invest for as a minimum.

Your call in the end, but if you know literally nothing then I would suggest staying clear of stocks and shares (or at least of self investing...) until you know more.

I might just stick to that 1 year fixed bond with Northern Rock.

If you're only looking for 1 year and have already used your cash ISA allowance for the year, then that's probably quite a good offer at the moment.

sho_me_da_money

Hey Aegis,

I have never done any ISA or anything at all.

I just have about 4,000 sat in a basic account earning no interest at all.

I would like to move it to something worthy and ad to it in the forthcoming months and this Northern Rock bons looked like a gooden.

Would you suggest that i got for an ISA instead?

I know theres 2 types mini, and maxi and i think before April this year i will have saved about 7,000.

The 6.99% on the NR account looks good and better than an ISA or am i wrong on that?

Aegis

sho_me_da_money wrote: »

Hey Aegis,

I have never done any ISA or anything at all.

I just have about 4,000 sat in a basic account earning no interest at all.

I would like to move it to something worthy and ad to it in the forthcoming months and this Northern Rock bons looked like a gooden.

Would you suggest that i got for an ISA instead?

I know theres 2 types mini, and maxi and i think before April this year i will have saved about 7,000.

The 6.99% on the NR account looks good and better than an ISA or am i wrong on that?

The Northern Rock bond will be taxed unless you are a non-taxpayer. This means that at the basic rate you'll be looking at a net interest rate of 5.59%, while an ISA is tax free completely. As such, locking into a year long fixed rate ISA at 6% will actually net you more than the Northern Rock fixed rate account.

Someone else can probably point you in the direction of an excellent mini cash ISA, both fixed and variable rate.