Question Cash ISA's

[Dudley52]

I'm looking to open a cash ISA and I've noticed that the rates have increased alot recently. AA is offering 3.5% + 3% bonus for a year.

I've never had one before but I know that after a year the rate drops so you ditch and go elsewhere.

At the moment I have premium bonds and I'm gonna ditch them for the ISA.

Do rates always increase towards the end of the tax year? Is it better to wait until the new tax year or will the rates drop again?

 

[ileks]

I very much doubt there is a consistently optimal time of the year to invest in an ISA. Just make sure you shop around for the best rates when you need to.

 

[Lamp]

That AA ISA is not that amazing. You're getting 3.5% for the first 12 months - fine. But you're not getting an additional 3% thereafter. The 3.5% includes the 3% bonus (which means 0.5% after the first year!), which means you're going to have to take your money out after a year and look for another deal.

There are better savings options m8. Consider 1 year bonds (better interest rates but not tax free), and decide if you really need instant access or not. Shop around...but try to get your money tucked away before April 5th this year. GL

 

[Chilly]

most taxable savings products are not worth it once you factor in 40%. Frankly, there's almost nothing out there which outpaces inflation right now. Banks are sitting in the middle of one of the most disgusting arbitrages in recent british history right now. We lend them @ 1% or less and they loan at 15%. CUNTS.

 

[Dudley52]

That AA ISA is not that amazing. You're getting 3.5% for the first 12 months - fine. But you're not getting an additional 3% thereafter. The 3.5% includes the 3% bonus (which means 0.5% after the first year!), which means you're going to have to take your money out after a year and look for another deal.

There are better savings options m8. Consider 1 year bonds (better interest rates but not tax free), and decide if you really need instant access or not. Shop around...but try to get your money tucked away before April 5th this year. GL

I thought thats the norm for ISA's. They offer a high rate to get new business, then you always leave after the first year when the rate drops. Looking around once a year for another deal isn't much hassle tbh.

 

[Ch3tan]

Kind of Dudley, remember that if you are transferring money into an ISA then you don't get as good a deal. The advertised rates are for new issue ISA's.

 

[- English -]

And don't ISA's have a limit to how much you can put it each year? like £3000 or something.

 

[Lamp]

Yeah...can't remember the exact figure - for this coming tax year its around the £5500 mark

 

[Ch3tan]

£10,680 cash and share's combined.

 

[Deebs]

most taxable savings products are not worth it once you factor in 40%. Frankly, there's almost nothing out there which outpaces inflation right now. Banks are sitting in the middle of one of the most disgusting arbitrages in recent british history right now. We lend them @ 1% or less and they loan at 15%. CUNTS.

ISA's are tax free you tard.

 

[Ch3tan]

ISA's are tax free you tard.

Learn to read Tony

 

[Deebs]

£10,680 cash and share's combined.

ie £5,340 maximum in cash the rest in shares or any combo as long as you do not go over £5,340.

 

[Chilly]

ISA's are tax free you tard.

I'm aware of that, I've got over 20k in ISAs
I was referring to the post above mine talking about bonds and so on.

 

[Dudley52]

Kind of Dudley, remember that if you are transferring money into an ISA then you don't get as good a deal. The advertised rates are for new issue ISA's.

Whats stopping someone transferring the ISA money into their bank account then back out into a new issue ISA. That rule doesn't make sense.

 

[Vae]

Whats stopping someone transferring the ISA money into their bank account then back out into a new issue ISA. That rule doesn't make sense.

Because you can only put a certain amount in to an ISA each year so if you've got say £15,000 in ISA's you can't put it all into a bank account then back into an ISA, only the yearly limit can go in. It's also worth remembering that if you take money out of an ISA in a year you can't put the same amount back in (unless you haven't used the whole years allowance yet obviously).

 

[old.user4556]

... or you can transfer your ISA with one bank to an ISA with another bank in the same tax year (full amount, pending other Ts and Cs).

 

[Scouse]

If you already own shares can you punt them (or a proportion thereof) into an ISA?

That way you won't be liable for any capital gains tax when you sell them?

Also, can you sell/buy shares within an ISA?

 

[rynnor]

If you already own shares can you punt them (or a proportion thereof) into an ISA?

That way you won't be liable for any capital gains tax when you sell them?

Also, can you sell/buy shares within an ISA?

My mate had these and used to rave about them right up until the last crash. The problem with the share ones aside from just getting wiped out by stock crashes is that you pay a lot in commission to buy/sell so the only people consistently cashing in are the stockbrokers...

 

[gohan]

I very much doubt there is a consistently optimal time of the year to invest in an ISA. Just make sure you shop around for the best rates when you need to.

acctaully all the deals come out about 3 weeks before then end of the financial year and last untill about 1 month in, then rates drop steadily for the next 10 months until the next financial year

 

[gohan]

ISA's are always only good for one year after that they are shocking, but so are all savings atm. No bank will offer a good rate for ISA transfers and they are only interested in "new money" IE cash or money from non-savings accounts. If you aren't saving a lot atm then yes you can wack like 3k in this year then 'recycle' the same 3k next year, (up to £5360) but if you put in the full amount this year then recycle it next year you can't add any extra to it so that only works for small savings, that said anything more than 10k you wanna look at fixed term bonds and other investments (some are risk free and most banks have free advice on it)


my advice is just get the best deal you can for this year (remembering that when they say bonus x% that will be included in the advertised rate NOT on top of) it may be that one ISA offers 4% this year dropping to base rate after that (0.5%) an one offers 3% dropping to 2% for 3 years or whatever, but although the second sounds better long term for all you know a standard savings account could be back at 4-5% by next year, it wasn't long ago that 6-7% was fairly standard for insant access savings.

 

[Chilly]

I do a FTSE-tracker style ISA. I buy shares in a load of companies across as many sectors in the FTSE as I can. This means my money grows at the rate the ftse does, which is normally faster than the economy and better than inflation.

 

[Vasconcelos]

Is your money deposit in a bank really yours?

What troubles me, is that nobody seemed to listen to him.

 

[rynnor]

I do a FTSE-tracker style ISA. I buy shares in a load of companies across as many sectors in the FTSE as I can. This means my money grows at the rate the ftse does, which is normally faster than the economy and better than inflation.

Which sounds nice until commissions come along. Or a ftse crash, or a banking crash or...

 

[Chilly]

Rynnor - I pay £10 a trade and I basically only trade once to buy the shares. I'm in it for the longhaul, so if a truely 10 year FTSE crash happens my life will be in the shitter anyway. The whole point is to keep your money worth roughly the same number of slices of toast from day to day and maaybe over the course of a year add a few more as profit. anything more is unrealistic gambling. The sooner people stop believeing they can beat the market the better.

 

[Lamp]

Chilly's right. Unless you have inside info & can make a certified killing, investing in the blue chips is a long term strategy. Thats how Warren Buffet made his money. Invest, forget about them for 15/20 years, then sell.