Would my money be better off in high interest a/c instead of ISA if I dont pay tax?

hippyju

As I am a student and work part time, I don't earn enough to be paying tax, so would my savings be better off in a high interest savings account, like Kaupthing Edge, as I currently have most of it in an ISA which pays 5.50%, and some in an account which pays 4.30%, although I have moved some into Halifax's Web saver, as their rate is currently 6.5% going down to 6.35% after July.

tiptoe_mouse

You can do better than 5.5% for an ISA - have a look at this brilliant post by Kazza which is constantly updated:

http://forums.moneysavingexpert.com/showthread.html?t=401374

If you can get a higher rate of interest in a non-ISA account, then you're right, you will be better off in terms of interest, as long as you remember to fill in an R85.

However, remember that the ISA allowance is very much "use it or lose it". By putting money in an ISA now, you'll be sheltering it from tax later, when you (hopefully) will be paying tax. I did this back when I was a student, and when I became a taxpayer I had more than one year's allowance worth already sheltered in my ISA.

HTH

tiptoe

planemad

Also with an ISA you do not have to disclose how much you have to the authorities if you were ever to claim support in the future.

tiptoe_mouse

Also with an ISA you do not have to disclose how much you have to the authorities if you were ever to claim support in the future.

I'm pretty sure this is not true. For means tested benefits (eg JSA Income support, housing benefit, council tax benefit) you have to declare your capital, and capital includes all savings, no matter what sort of account they are in.

It might be different for tax credits.

tiptoe

Milarky

tiptoe_mouse wrote: »

I'm pretty sure this is not true. For means tested benefits (eg JSA Income support, housing benefit, council tax benefit) you have to declare your capital, and capital includes all savings, no matter what sort of account they are in.

It might be different for tax credits.

tiptoe

It is different for tax credits - income from ISAs does not count and capital is ignored altogether

Mikeyorks

hippyju wrote: »

although I have moved some into Halifax's Web saver, as their rate is currently 6.5% going down to 6.35% after July.

..... sorry but those figures are very wrong. The current gross on the 'with card' option is 5.5% ..... and it drops to 4.25% on 18th July as the 1.25% bonus expires. It's OK'ish for the next month ..... but get the money elsewhere then! And you can't be citing the 'without card' websaver ... as that's only 4.36% to 4.45% (tiered).

http://www.halifax.co.uk/savings/variablewebsaver.asp

Unless you have £10k or so in the ISA (or are at the start of a 4-6 year stint at Uni) .... I would personally stick with the ISA. But do consider transferring it to somewhere at 6%+. There is no current benefit if you're not a taxpayer ... but if you're going to be one in the next couple of years the differential between a best rate ISA / easy access Savings account - is mild. You can do better by going for a fixed rate term deposit .... but in your position I wouldn't freeze all my assets!

hippyju

Sorry, I didn't make it clear. I opened the Halifax Web saver, then I transferred it to the Halifax web saver 'Extra' account, which does pay 6.5% currently (I think...)

I have £5000 there, which I would like to move to KaupthingEdge after July, but because the interest at Halifax is paid annually, will I still get the interest for the last couple of months the money's been in there, even if I leave the account with Zero?

htp://www.halifax.co.uk/savings/websaverextra.asp <-- Just checked, it's actually 6.35% currently, going down to 6.05% after July 18th

jem16

hippyju wrote: »

I have £5000 there, which I would like to move to KaupthingEdge after July, but because the interest at Halifax is paid annually, will I still get the interest for the last couple of months the money's been in there, even if I leave the account with Zero?

You will only get the interest if you close the account. If you leave it open the interest will not be paid until it is due.

Jonbvn

highwayfive wrote: »

Have used Witan for my ISA savings plan and they have been great to deal with.

Witan offer investment trusts. This is not what the OP was looking for.

tiptoe_mouse

me wrote: »

You can do better than 5.5% for an ISA - have a look at this brilliant post by Kazza which is constantly updated:

http://forums.moneysavingexpert.com/showthread.html?t=401374

I forgot that Kazza said she wouldn't be around to update the thread for a while, due to a bereavement. You could look at this article:

http://www.moneysavingexpert.com/savings/best-cash-isa

or for transferring an existing ISA take a look at:

http://www.moneysavingexpert.com/savings/cash-isa-transfers

Or you could do a search on http://www.moneysupermarket.com/ISA/Default.asp to find the best ISAs.

HTH

tiptoe