17 year old needing help choosing ISA

muddyfox470

When I was 16, I first opened an account with National Counties Building Society, their Guaranteed ISA is always a good rate, however I don't think it accepts transfers in, and after 1 year you get put to their standard rate, however you can easily transfer out. I was able to apply and operate the account very easily without having a single branch anywhere near me!

I also had an abbey Postal ISA (back in the day) which again paid a good rate but dropped down after a year. And have had my money in the Direct ISA with NSandI the past 2 years until the start of the new tax year.

I now have my money spread a little.
Nationwide Fixed Rate, 2 Year @ 6.15% (Transferred in)
National Counties First Issue ISA @ 5.51% (Small amount in this one to keep it open)
IceSave ISA @ 6.10% (Transferred in)
and have just recently opened a 1 Year Fixed Bond with IceSave @ 7% and because my earnings are still tax-free (uni student earning below threshold) it works out a little better for me to do that.

If you can apply for an IceSave account (presuming they don't have an 18 age limit) and if youc an't see yourself maxing out your allowance, try saving in a normally taxable account and then move it into an ISA once the term has finished. Don't forget your R85 form however - The one thing I like about IceSave is the ease of use, very little paperwork and decent rates!

Obviously you want to be paying into ISAs as soon as possible to build up your tax free savings, but until I was 18 I was going with fixed term, guaranteed returns, then moved them into ISAs in the following year. I didn't use my full allowance last year, and have yet to use my allowance this year. Rates are changing too fast at the moment and thats why I chose fixed rates. Most of my money is now with IceSave - I now have an ISA, instant access online savings and the fixed rate account.

But personally if you're not a tax payer, I would try seeing if there are some student accounts you are still eligible that offer some nice benefits. Alliance and Leicester offer a nice 10% if you take up their 16-21 account, which gives you a cash/debit card (upto £1000). I was a bit annoyed that they didn't offer it / I didn't see it when I was still between the age range. http://www.alliance-leicester.co.uk/currentaccounts/index.asp?page=premier21&ct=curracchome Might be worth profiteering from their offer as they don't require a minimum inflow of cash through the card.
Basically what I'm trying to say is that there are probably some child accounts that you are eligible that provide healthy returns and tax free, providing you are eligible (R85 form) - even at 21 (they tend to be available up to 23yo) I still have a couple as they still offer > 6% with some nice bonuses / benefits.

Sorry for the essay, last bit: obviously don't tie up all your money in fixed rate accounts as you will want some money to spend, as you never know what might happen in the coming year.