Maxi ISAs vs Mini ISAs

Cricri

Hi all,
I currently have a mini cash ISA account. I can put £3K a year on it, and in the last few years, I'd estimate that it averaged %5.6 ish gross interest rate .
I just talked to a finance adviser who said that the Maxi ISA makes my money work harder. However, this involves share markets, and thus there is risk. Besides, I already talked to my parents and an adviser back at home, and they told me that the share markets haven't been much of an excellent investment the last few years.
Can anyone with a Maxi ISA tell me roughly how much gross interest they got in the last few years?
Thanks in advance!

debbie42

The maxi/mini label may be a bit misleading as you can (currently) also have a mini S&S ISA. Next year this labelling changes.

The ISA is just a tax wrapper: the investments within vary from person to person, so returns vary. General advice is to be looking at least 5 years for investing in S&S. The stock market is very volatile at the moment, but historically has had better returns in the longer timescales than similar cash savings. You need to have some idea of your risk level and timescale to formulate an investment strategy.

There is a sub-board with some FAQ type threads on all this stuff.

Cricri

That's why I have mini cash ISA and e-savings right now: some interests, and NO risk
What's is mini S&S ISA? Stocks and shares? In which case, I can't see what the difference is with Maxi ISA

meester

Cricri wrote: »

That's why I have mini cash ISA and e-savings right now: some interests, and NO risk
What's is mini S&S ISA? Stocks and shares? In which case, I can't see what the difference is with Maxi ISA

Try the ISA board......

debbie42

Useful thread on all this here:
http://forums.moneysavingexpert.com/showthread.html?t=416337

There is still a risk with saving cash: the risk is that you may not make nearly so much money long term as with investment products. The psychology is different though!

Currently, you can have 3K mini cash ISA and 4K Stocks & Shares ISA OR 7K Maxi ISA. (Not both). This is changing for the next tax year though.

wombat42_2

debbie42 wrote: »

Useful thread on all this here:
http://forums.moneysavingexpert.com/showthread.html?t=416337

There is still a risk with saving cash: the risk is that you may not make nearly so much money long term as with investment products. The psychology is different though!

Currently, you can have 3K mini cash ISA and 4K Stocks & Shares ISA OR 7K Maxi ISA. (Not both). This is changing for the next tax year though.

42 rools ok

dunstonh

I just talked to a finance adviser who said that the Maxi ISA makes my money work harder.

Thats a funny way of wording it but I suppose over the long term that is potentially correct.

However, this involves share markets, and thus there is risk.

It doesnt have to involve the stockmarket if you dont want to. However, it does involve a risk .

Besides, I already talked to my parents and an adviser back at home, and they told me that the share markets haven't been much of an excellent investment the last few years.

Correct, the average over the last 3 years is around 10% a year for a cautious individual. Higher risk would have seen massive gains but you dont appear to sound like a higher risk investor.

Can anyone with a Maxi ISA tell me roughly how much gross interest they got in the last few years?

zero.

It has nothing to do with interest. Investments have a daily value and some days they will be up and some days they will be down. Over the long run you would expect the returns to exceed the cash ISA but there will be periods in the short term were the returns are worse.

Cricri

Wow, I didn't study accounting and finance, so I can't be bothered with terminology. What I meant is: if I put £500 on an account and 3 years later, I have £515, then I got 5% (ish) "interest" per year overall. So 10% seems a lot, much more than what was suggested to me.
But thanks for the answers people, it seems that indeed the standard cash ISA is the best for me: it doesn't need to be attended and you always know how much you expect to find next time you check it out.

jamesd

Bank accounts provide certainty but it is worth you taking a look at these investments that can be held in a Stocks and Shares ISA:

• Blackrock UK Absolute Alpha fund which has returned 10% over the last twelve months. See the chart comparing it to the FTSE All-Share index, this fund in red, the index in blue, and notice how stable it's been.
• Invesco Perpetual Income fund. Yellow in the chart. It's one of the best funds in the UK, with something over 15% long term average annual growth rate, though it does vary year to year. 12 month annual growth starting with 2003-4 have been: 39.83% 19.36% 29.82% 21.58% -3.85%. Not absolute predictability but still enough that after a few years you're unlikely to see a big enough drop to leave you down on where you started.
• Invesco Perpetual Corporate Bond or some other corporate bond. Green on the chart. Doesn't move up and down much, annual returns have been 10.51% 6.24% 5.4% 1.92% -1.61%.
• Invesco Perpetual Monthly Income Plus fund, pale blue on the chart. Annual returns have been 34.86% 13.29% 9.75% 9.15% -5.15%.

No guarantees but some of those are excellent options, provided you can stand some up and down movement, you can choose how much by which you select, or better select a mixture.

kipwilliams

Cricri wrote: »

What I meant is: if I put £500 on an account and 3 years later, I have £515, then I got 5% (ish) "interest" per year overall.

maybe a tad off topic, but that's slightly under 1% interest per year.

5% would be £578.81 after three years, approximately...