Savings newbie (ISA, HSBC, Halifax help)

jenlou

Hello

I am a post grad with 15K in student loans.

I elected to take out the maximum student loan this year as I figured that I would be better off investing the money.

Here is what I am able to invest every month this year

£500 Oct 05
£150 Nov 05
£150 Dec 05
£1900 Jan 06
£150 Feb 06
£150 March 06
£1900 April 24th 06
£150 May 06
£150 June 06
£150 July 06

Although I am not paying tax now I should be in employment from July 2006.

Should I pay as much into the ISA for tax year 2005/2006 as I will be a tax payer soon?

I have a HSBC current account and am interested in their 8% offer but I'm concerned that there are pitfalls I'm not aware of.

What's the difference between the Halifax regular saver (7%) and the HSBC offer (besides 1%!!!!)

I also have a current acocunt with Halifax which I don't really use, my money gets paid into the HSBC current account.

I hope that anybody can help me as this is the first time that I have had any savings (if you exclude the student loans) and I want to get it right.

Thanks for your help

Jenny

grumbler

Hi and welcome!

jenlou wrote:

Should I pay as much into the ISA for tax year 2005/2006 as I will be a tax payer soon?

Yes, otherwise you will lose your current year £3000 allowance.

I have a HSBC current account and am interested in their 8% offer but I'm concerned that there are pitfalls I'm not aware of.

No pitfalls, just need to find a new good place for money when accont matures after 12 months. I think next year ISA will be the right place...

What's the difference between the Halifax regular saver (7%) and the HSBC offer (besides 1%!!!!)

I don't know any difference ...

masonic

Jenny,

As grumbler says, you want to get as much of your money into ISAs as you can before next July.

As for the remainder, it looks like you have the right idea with regular savers, but you might want to consider when the interest payments are made when you weigh up your options. Any interest you are paid up until April 2006 will not be taxed, but any interest (including interest earned before April 2006) that is paid after that will be taxed. So, if you go for an account that pays annual interest in, say October 2006, then you will be liable to pay tax on all of it.

zar

Hi Jenny,

The HSBC regular savings account is "Available only to customers who have their monthly salary or retirement income paid to an HSBC Bank current account." (from the website) so if you have a student account I don't think they will let you have one, although it could be worth trying depending on your exact circumstances? The other potential pitfall is that if you needed any of the money then you have to close the account and wouldn't get any interest. I don't know anything about the halifax one I'm afraid.

Zar.