Cash ISAs: The Best Currently Available List

Kazza242 · 19 March 2007 at 2:00PM

jimbo_the_jetset wrote: »

The Barclays web site seems to quote 6.5% for the Tax Beater ISA but then states (6.31% tax free)? Surely an ISA is tax free?

I think this might relate to the 1% bonus not being tax free? I'm gonna call Barclays to clear that up? Anyone else checked this out?

Hi jimbo

The 6.50% rate is the AER (Annual Equivalent Rate) and the 6.31% is the gross rate of interest paid. Remember this Barclays cash ISA pays interest monthly, therefore if you left the interest in the ISA (which is the best thing to do) you would earn interest on your interest. This would make your overall annual rate of interest 6.50%. All interest paid is tax free and the bonus rate is tax free also.

jimbo_the_jetset · 19 March 2007 at 2:36PM

Kazza242 wrote: »

Hi jimbo

The 6.50% rate is the AER (Annual Equivalent Rate) and the 6.31% is the gross rate of interest paid. Remember this Barclays cash ISA pays interest monthly, therefore if you left the interest in the ISA (which is the best thing to do) you would earn interest on your interest. This would make your overall annual rate of interest 6.50%. All interest paid is tax free and the bonus rate is tax free also.

Ahhh. Didn't notice it paid interest monthly. Don't bother asking Barclays though, their man in India said the rate you'd get is 6.31%!!

TimmyP_2 · 19 March 2007 at 5:51PM

Just a quick question which I think should be easily cleared up.

I've currently got money in a YBS E-Isa. I've only had it for a couple of months and will have £600 in it by the end of the financial year (my finances have only just started to allow me to save some £). Would it be worth me closing my YBS account, having the funds withdrawn back to my lloyds current account and then pay that into the Barclays Tax Beater Cash Isa as my initial deposit (obviously after Apr 5th)? Or would I be better off leaving it with YBS. I know I'm not talking about vast sums of cash like some people, but I'd still like to maximise the potential of my so called "investment!!" I'd also be paying in around £250 / 275pcm if that makes a difference...?

Thanks

TimmyP_2 · 19 March 2007 at 5:55PM

Kazza242 wrote: »

Hi jimbo

The 6.50% rate is the AER (Annual Equivalent Rate) and the 6.31% is the gross rate of interest paid. Remember this Barclays cash ISA pays interest monthly, therefore if you left the interest in the ISA (which is the best thing to do) you would earn interest on your interest. This would make your overall annual rate of interest 6.50%. All interest paid is tax free and the bonus rate is tax free also.

Kazza

The T&C's state the following with regard to interest:

"3.2 Interest is calculated on the daily statement balance and credited to the account annually, at or around the 6 April and when the account is transferred or closed, if applicable."

I'm guessing there changing from monthly to annual interest payments?

Kazza242 · 19 March 2007 at 8:55PM

TimmyP wrote: »

I've currently got money in a YBS E-Isa. I've only had it for a couple of months and will have £600 in it by the end of the financial year (my finances have only just started to allow me to save some £). Would it be worth me closing my YBS account, having the funds withdrawn back to my lloyds current account and then pay that into the Barclays Tax Beater Cash Isa as my initial deposit (obviously after Apr 5th)? Or would I be better off leaving it with YBS.

No, don't close or withdraw it from your YBS isa. As you have used £600 of your 2006/07 £3,000 cash isa allowance, if you withdraw funds from it you lose that allowance forever. Keep the £600 in the isa and then from April 6th 2007 - April 5th 2008, you can deposit up to £3K again.

Whereas, if you withdrew the £600 from your YBS ISA and deposited it into the Barclays ISA from April 6th you would only be allowed to add another £2,400.

The T&C's link on the Barclays webpage takes you through to the general Barclays ISA T&C's. However, if you scroll down you'll find the Tax Beater ISA has it's own specific set of terms and conditions that apply to it only. It states:

Tax Beater Cash ISA – specific terms and conditions March 2007

3 Interest is calculated on the daily statement balance and credited to the account on the first working day of each month. This condition replaces condition 3.2 of the general terms and conditions.

This condition confirms that interest is paid monthly, which explains why both gross and AER figures are quoted.

zendrix · 20 March 2007 at 9:03AM

Isn't the Abbey Super ISA at 8.1% a hands down winner for which ISA to choose. The only downside I can see is a restriction on withdrawing money? Glad to hear feedback if I have this wrong, as wanting to put my 3k away somewhere today if possible.

zendrix · 20 March 2007 at 9:05AM

zendrix wrote: »

Isn't the Abbey Super ISA at 8.1% a hands down winner for which ISA to choose. The only downside I can see is a restriction on withdrawing money? Glad to hear feedback if I have this wrong, as wanting to put my 3k away somewhere today if possible.

Apologies Ignore me just read through the list again and saw the abbey super mentioned and that you have to have money tied up for 3 years!

Kazza242 · 20 March 2007 at 10:52AM

zendrix wrote: »

Apologies Ignore me just read through the list again and saw the abbey super mentioned and that you have to have money tied up for 3 years!

Yes, I edited the ISA's list yesterday evening to highlight the other conditions of the Abbey Super ISA, because I'd received some PM's from people asking why I wrote that I "personally would avoid this isa".

Whatever money you choose to deposit into the Super ISA, you have to put the same amount into the Guaranteed Growth Plan (GGP). i.e. if you deposited £15,000 into the Super ISA you would have to deposit another £15,000 into the GGP (=£30,000).

The Super ISA 8.1% rate only lasts until 01.05.2008 and then falls to just 5.25% (£9K+) or 5.00% (£1-£8,999). Even if you transfer out at this time, your other £15K would still be tied up in the GGP for another 2 years minimum! After it's matured it's likely that you would very little return (if any at all) on your money.

liamsquire · 20 March 2007 at 11:29AM

Hi guys, great thread.

I have a small question.

I have an ISA with A&L which I am looking to move. I think I might transfer it to the Abbey 5.5% ISA. Just out of interest, is it possible for me to transfer my ISA to Abbey and open a new ISA, i.e. NS&I and then deposit new money in there?

thumshie · 20 March 2007 at 11:45AM

liamsquire wrote: »

Hi guys, great thread.

I have a small question.

I have an ISA with A&L which I am looking to move. I think I might transfer it to the Abbey 5.5% ISA. Just out of interest, is it possible for me to transfer my ISA to Abbey and open a new ISA, i.e. NS&I and then deposit new money in there?

If you have deposited into the A&L Isa this tax year, you can move and open the NS&I after April 6th(New tax year)

If you havn't deposited into the A&L Isa this tax year, you can move and open the NS&I now and get as much of your £3000 allowance in before April 5th.

Cash ISAs: The Best Currently Available List

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