Need a Basic Explaination pls

RickMoney

Hi,

I'm just starting out in the saving area and am in need of an explaination on ISA's. From the main site, I understand that ISa's should be one of the first targets for putting in savings. However, how is the interest added to the account?

with the deadline fast approaching, is the only benifit for this year the opportunity to use the £3k allowance? i.e I won't gain any tax free interest this tax year?

What I mean is, if I'm only likely to have £3k over this year would it make much difference if I put it in an ISA now or after April 5th?

Thanks

Rick

Looking_after_the_pennies_2

Hi Rick

the interest accrues daily and usually paid annually (sometimes monthly)

if you will save less than the £3,600 limit for the next tax year before April 09, then it is probably not worth trying to rush an application through before April 5th as you will not gain much in extra interest

RayWolfe

RickMoney wrote: »

What I mean is, if I'm only likely to have £3k over this year would it make much difference if I put it in an ISA now or after April 5th?

True, but what if you are wrong and do find some more cash next year? You would have given up the allowance for this year. Even if you don't, every day of interest free income is an extra day.
Do it now and you will be on your way to becoming a MSE.

taxdoctor

I agree with RayWolfe, If you have the ability to to put some money into an ISA before the 5th then do so!

Who knows what will happen next tax year. At least you're then giving yourself the option.

RickMoney

Thanks for the explaination. I can understand your points of view and I will try and get an application through before the deadline.