[guide.chat] savings isa u ks worst isas
- From: vanessa <qwerty1234567a@xxxxxxxxx>
- To: "GUIDE CHAT" <guide.chat@xxxxxxxxxxxxx>
- Date: Sun, 15 Jan 2012 19:19:18 -0000
When searching for superior savings accounts, it's crucial to look into these
four factors:
1. the interest rate paid (ideally, the higher, the better);
2. whether interest is tiered (which means larger balances earn higher rates
of interest);
3. if the interest paid is taxable; and
4. how easy it is to access your cash.
Generally speaking, to earn the highest rates of interest, you have to deposit
large sums or lock away your money for an extended period of, say, one to five
years. In effect, this is a trade-off -- in return for higher, fixed rates, you
agree not to make any withdrawals during the fixed-rate period.
[Useful: The top-paying cash ISAs]
The best rainy-day funds
Of course, when looking for a home for your rainy-day or emergency fund, you
don't want to lock up this cash inside a notice account. After all, what's the
point of having 'crisis' funds if you can't access them when you need to?
That's why I'd recommend keeping your emergency savings in a top-paying, easy
access savings account.
What's more, depending on your personal tax rate, the taxman may run off with
between a fifth (20%) and half (50%) of your pre-tax savings interest. This
explains why I'm a huge fan of cash ISAs, the tax-free savings accounts open to
all of UK residents aged 16 and over.
In the 2011/12 tax year (which ends on 5 April), you can deposit up to £5,340
into a cash ISA. Therefore, for a couple, this limit doubles to £10,680. After
6 April, the 2012/13 tax year kicks in and the cash ISA limit increases by £300
to £5,640.
By saving inside a cash ISA, rather than a taxable savings account, you can
boost your after-tax interest by between 25% and 100% (all other things being
equal). Furthermore, you are free to transfer money from bog-standard savings
accounts into a cash ISA, as long as these transfers don't exceed the deposit
ceiling for a cash ISA.
Britain's top tax haven
Since their launch in April 1999, ISAs have grown to be the UK's most popular
tax haven, with more than 19 million Brits using these tax-free accounts.
Alas, millions of us have dumped money into cash ISAs and, instead of keeping
an eye out for the best rates, have left our money to rot in inferior accounts.
The good news is that it's a fairly simple process to transfer your cash from
poorly performing accounts to cash ISAs paying top rates of interest.
No interest at all
To find out how low ISA interest rates can go, I checked the rates payable for
ISAs on balances of £1+. The bad news is that I found no fewer than 38 cash
ISAs that pay zero interest on £1.
If you have small sums stored inside the following accounts, then I'd urge you
to switch without delay:
Institution
ISA
account name
Notice
period
AA
AA Internet Access ISA (Issue 2)
No notice
Aldermore
30 Day Notice Cash ISA Issue 2
30 days
Britannia
Limited Access Cash ISA
Instant
Buckinghamshire BS
30 Day Cash ISA Issue 2
30 days
Buckinghamshire BS
Gold Rush 120 Day Notice Cash ISA Issue 2
120 days
Chelsea BS
Over 50's Cash ISA (4th Issue)
Instant
City of Derry BS
Cash ISA
30 days
Clydesdale Bank
Cash ISA - 40 Day Notice
40 days
Darlington BS
Rolling Tracker Cash ISA 2 Limited
Edition
Instant
Darlington BS
Rolling Tracker Cash ISA 3 Limited
Edition
Instant
Dudley BS
Cash ISA
Instant
Furness BS
ISA 90 Issue 2
90 days
Hinckley & Rugby BS
120 Day Notice Cash ISA
120 days
Hinckley & Rugby BS
7 Day Notice Cash ISA
7 days
Ipswich BS
90 Day ISA
90 days
krbs
Branch 60 Day Notice ISA Issue 1
60 days
krbs
Internet 60 Day Notice ISA Issue 1
60 days
krbs
Postal 60 Day Notice ISA Issue 1
60 days
Manchester BS
Premier Instant ISA Issue 5
Instant
Mansfield BS
Cash ISA Monthly Income
30 days
Market Harborough BS
2011 Brighter ISA Issue 9
Instant
Market Harborough BS
Cash ISA 60
60 days
Marsden BS
Direct Cash ISA 30
30 days
National Counties BS
1st Issue 45 Day Cash ISA
45 days
Nationwide BS
75 Day ISA Issue 1
75 days
Nationwide BS
Champion ISA
60 days
Nationwide BS
Online ISA Issue 2
No notice
Newbury BS
Senior Monthly Cash ISA
Instant
Principality BS
Principality Promise ISA
30 days
SAGA
ISA Saver (Issue 3)
No notice
Sainsbury's Finance
Cash ISA
No notice
Shepshed BS
Bonus ISA
60 days
Shepshed BS
Postal ISA
No notice
Skipton BS
Online Super Cash ISA
No notice
Skipton BS
Super Cash ISA
No notice
Teachers BS
Cash ISA Notice 90
90 days
Tipton & Coseley BS
Premier ISA
No notice
Yorkshire Bank
Cash ISA - 40 Day Notice
40 days
Source: Moneyfacts
In fairness, there is one reason why some of these accounts pay no interest on
low balances. For any interest to be paid, some accounts require a minimum
balance of, say, £500. Below this threshold, the interest rate drops to zero.
Then again, my view is that to qualify as genuine savings accounts, accounts
must pay interest on even the smallest balances. Therefore, the above 38 cash
ISAs get a firm thumbs-down from me.
35 awful accounts
Digging deeper, I found another 35 cash ISAs that pay interest of below 1% a
year on balances of £1 and upwards. What disappoints me is that so many of
these inferior ISAs come from building societies, the traditional home for
British savings since Victorian times. They are:
Institution
ISA
account name
Yearly
interest
Notice
period
Dunfermline BS
Cash ISA Issue 3
0.10%
Instant
Dunfermline BS
Direct Cash ISA Issue 3
0.10%
No notice
Santander
Easy ISA
0.10%
Instant
Wesleyan Bank
Cash ISA
0.10%
No notice
Derbyshire BS
Cash ISA
0.25%
Instant
First Trust Bank (NI)
Cash ISA
0.25%
Instant
Nationwide BS
Instant Access ISA
0.25%
Instant
Newcastle BS
Nova ISA
0.30%
Instant
Norwich & Peterborough
BS
Cash ISA
0.30%
Instant
Norwich & Peterborough
BS
Gold Cash ISA
0.30%
Instant
Smile
Cash ISA
0.31%
No notice
Clydesdale Bank
Cash ISA
0.40%
Instant
Newcastle BS
Newcastle 30 days ISA
0.40%
30 days
Yorkshire Bank
Cash ISA
0.40%
Instant
Britannia
Cash ISA
0.50%
Instant
Cheshire BS
Cash ISA 3rd Issue
0.50%
Instant
Marsden BS
Cash ISA
0.50%
Instant
NatWest
Cash ISA
0.50%
Instant
Newcastle BS
Newcastle 55 ISA
0.50%
Instant
Northern Bank (NI)
Cash ISA
0.50%
No notice
Saffron BS
Reward Cash ISA (Issue 3)
0.50%
Instant
Santander
Direct ISA Issue 7
0.50%
Instant
Smile
Cash ISA
0.50%
No notice
The Co-operative Bank
Cash ISA
0.50%
No notice
Ulster Bank
Cash ISA
0.50%
Instant
Royal Bank of Scotland
Instant Access Cash ISA
0.55%
Instant
Melton Mowbray BS
Cash ISA Issue 2
0.60%
Instant
Principality BS
Cash ISA
0.60%
Instant
Triodos Bank
Cash ISA
0.65%
33 days
Barnsley BS
Falcon Cash ISA
0.70%
Instant
Cambridge BS
Cash Instant Access ISA
0.70%
Instant
Shepshed BS
Cash ISA
0.75%
60 days
Yorkshire BS
ISA Plus
0.80%
Instant
Selftrade
Cash ISA Issue 2
0.90%
No notice
Hanley Economic BS
Instant Access ISA
0.95%
Instant
Source: Moneyfacts
As you can see, these 35 cash ISAs pay tax-free interest of between 0.1% and
0.95% a year. According to Moneyfacts, the average no-notice savings account
pays interest of 0.91% a year. Thus, even though they pay tax-free interest,
almost all of the above ISAs will generate less interest than the typical
taxable savings account.
Ditch and switch today
With the Consumer Prices Index (CPI) measure of inflation currently running at
4.8% a year, there isn't a single standard savings account that beats inflation
for basic (20%), higher-rate (40%) or additional-rate (50%) taxpayers.
In fact, to keep up with the rising cost of living, the savings of a basic-rate
taxpayer need to earn 6% a year before tax. For higher-rate taxpayers, this
hurdle rises to 8% and, for taxpayers in the 50% bracket, this pre-tax interest
rate is an impossible 9.6% a year. Given that the Bank of England's base rate
is a mere 0.5% a year, these rates simply aren't achievable.
Nevertheless, please don't leave your savings gathering dust and shrinking in
value inside sub-standard savings accounts. By ditching and switching (which
involves a little bit of effort and paperwork), your hard-earned cash could be
earning tax-free interest of between 3% and 4.5% a year in a best buy cash ISAs.
from
Vanessa The Google Girl.
my skype name is rainbowstar123
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