ISA savings query

darkfibre

Hello all,

I have just opened an A&L account, with the intention of opening up a Direct ISA with them and getting them to transfer my funds from NS&I into it at the 6.25% rate.
I am now thinking to ditch that and open a Kaupthing account after reading about it recently at a rate of 6.5%. Am I right in thinking that this account is NOT an ISA account, just an ordinary savings account? Hence, I should be ok to open one as from my understanding it is not possible to open more than one ISA account in any given tax year?

Lokolo

You can open as many ISAs as you want but you can only put new money (as in money you haven't had from previous ISAs) in one.

And yes its a regular savings account so you will actually get 6.31% AER after tax. Unless you don't pay tax and fill an R85 form in.

Lavendyr

Er no, you'll actually get 5.2% after tax!

Lokolo

Lavendyr wrote: »

Er no, you'll actually get 5.2% after tax!

You know what, thats exactly what I orignally thought. I will find the site again and show you why I wrote otherwise.

[edit]

i actually read it wrong! I read the gross and thought it said rate after deduction of tax not befoooooore!!!!

darkfibre

So in summary I'm better off sticking with A&L?

Lokolo

darkfibre wrote: »

So in summary I'm better off sticking with A&L?

Upto you. Interest rates could sore upto 8% and you will get higher interest than A&L...

whu

are you a tax payer ?

darkfibre

Yes, I'm a tax payer.

Hmmm tough call...but Kaupthing does say:

"The interest rate will be at least 0.30% (gross) higher than the Bank of England Official Rate until 1st February 2012" - which sounds kinda good...?

Thanks for the replies so far guys...

Lokolo

darkfibre wrote: »

Yes, I'm a tax payer.

Hmmm tough call...but Kaupthing does say:

"The interest rate will be at least 0.30% (gross) higher than the Bank of England Official Rate until 1st February 2012" - which sounds kinda good...?

Thanks for the replies so far guys...

Well the rate at the moment is 5% so they can, if they want, your give you 5.3%, which obviously is a lot lower.

debbie42

darkfibre wrote: »

Yes, I'm a tax payer.

Hmmm tough call...but Kaupthing does say:

"The interest rate will be at least 0.30% (gross) higher than the Bank of England Official Rate until 1st February 2012" - which sounds kinda good...?

If you are a tax payer (even if only basic) then the A&L ISA will pay you more interest on the same amount of money, even though the rate is 0.25% lower.

e.g. £3600 in an account:
6.25% tax free returns £225
6.5% returns £187.20, after tax at 20%.

darkfibre

Great stuff, I'm sticking with A&L me thinks! Thanks for all your help...:beer: