NFR - Anyone know anything about ISA’s?

[Jimsbeerbelly]

My bank, without naming names, are great, for every day banking etc, but, their saving options a bit poo, shall we say.

Their every day saver account, that I've quite a bit of money saved in, offers a rubbish 0.01% interest rate, and, their variable ISA is no much better at around 0.5%

If we work on a figure of say 20k, what interest would a stand to make, and, how do I work my money a bit harder?

Are there better ISA's out there, is it all about stock and shares?

Someone please enlighten me a little. 

[Twig]

Tricky time Jim. Normally I would say select your own shares and keep them in an ISA. The ISA is like a wrapper that gets you the tax benefits.  By selecting shares you can either go for dividend shares (income paying) or growth (little income but better chance of share price growth). Right now it depends a bit on your attitude to risk. And this is risk in two senses. There is a question of what will happen to share prices going forward if we hit a major recession (that is a fairly classic risk attitude issue) and then there is the question of what will happen to dividends, many of which have been suspended or cut (this is not the usual issue you are expected to consider when you are asked to consider risk because dividend payers were always considered a safe bet).

Having said all that, IMO you can only generate income of say 4% if you go for a shares ISA.  Many of the classic divi paying companies will probably survive the recession and restore their divis to something like the previous levels.  If their share prices also recover you have enjoyed a double win.  You are welcome to drop me a personal message via this board if you would like some info on the websites I use to pick a few shares.  I can also let you know which company I use to set up and administer my ISAs (their charges are very reasonable and they are very well established).

I should stress that I'm not an adviser or anything just an enthusiastic amateur investor.

[FFCBerks]

Some very good points and sound logic there Twig.

I'm a Chartered Wealth manager and a Chartered Fellow of the Securities Institute, with 25 years of stockbroking and investment management experience, and Twig is right - to stand a chance of even beating inflation at this time you would need to think about investing rather than saving. The first thing to consider, however, is how long will it be until you might need your money out.  Generally, a timescale of less than 5 years is not ideal - as anyone that invested towards the end of last year will currently tell you.

When checking current savings rates for clients, I often look to Moneyfacts for info. I used to get a copy on my desk every week, but now it's just a newfangled website! The best instant access and fixed-term ISA rates are all there. They are not great, but seem to be better than your bank!

Good luck

Wayne

[Woolly Mammoth]

Better off putting it in Premium Bonds

[filham]

Better off putting it in Premium Bonds

Premium Bond returns are in fact as miserly as savings. As already stated the only return worth having in recent years has been in equity based funds but I have just suffered a big loss due to the effects of Coronavirus.

The interest on bank savings is now approaching zero but bank lending and mortgage rates are around 4% while loyalty card rates are sky high. The banks are not suffering in any way.

[FFCBerks]

I like Premium Bonds - but the 'average return' is misleading owing to the top prize being so large. Filham is right, the real return - unless you are lucky - is miserly. In order of preference (ignoring important, investor-specific factors such as age, income requirements, capacity for loss, attitude towards risk and timescales) the 'pots' to consider are typically:

Pension
Investment ISA
Investment portfolio
EIS/SEIS/VCT/BR

Importantly, 'Cash' should be considered first as foremost as a holding place for day-to-day spending, upcoming large-ticket purchases and an 'emergency' fund. As Premium Bonds are relatively instant access there is no reason at all for them not to form a part of this emergency buffer. In an ideal world (!) you would max-out as many as possible...

Not financial advice, the value of investments may fall as well as rise, blah blah blah (in case my regulator is watching..!)

[Woolly Mammoth]

Better off putting it in Premium Bonds

Premium Bond returns are in fact as miserly as savings. As already stated the only return worth having in recent years has been in equity based funds but I have just suffered a big loss due to the effects of Coronavirus.

The interest on bank savings is now approaching zero but bank lending and mortgage rates are around 4% while loyalty card rates are sky high. The banks are not suffering in any way.

Exactly that is why it's better off in Premium Bonds.

[Woolly Mammoth]

I like Premium Bonds - but the 'average return' is misleading owing to the top prize being so large. Filham is right, the real return - unless you are lucky - is miserly. In order of preference (ignoring important, investor-specific factors such as age, income requirements, capacity for loss, attitude towards risk and timescales) the 'pots' to consider are typically:

Pension
Investment ISA
Investment portfolio
EIS/SEIS/VCT/BR

Importantly, 'Cash' should be considered first as foremost as a holding place for day-to-day spending, upcoming large-ticket purchases and an 'emergency' fund. As Premium Bonds are relatively instant access there is no reason at all for them not to form a part of this emergency buffer. In an ideal world (!) you would max-out as many as possible...

Not financial advice, the value of investments may fall as well as rise, blah blah blah (in case my regulator is watching..!)

Your investment is safe in Premium Bonds and as you say if you are lucky you can yield a lot, so be lucky not unucky and your money is safe.
Obviously the more bonds you have the luckier you get, so be lucky

[Dodger53]

I like Premium Bonds - but the 'average return' is misleading owing to the top prize being so large. Filham is right, the real return - unless you are lucky - is miserly. In order of preference (ignoring important, investor-specific factors such as age, income requirements, capacity for loss, attitude towards risk and timescales) the 'pots' to consider are typically:

Pension
Investment ISA
Investment portfolio
EIS/SEIS/VCT/BR

Importantly, 'Cash' should be considered first as foremost as a holding place for day-to-day spending, upcoming large-ticket purchases and an 'emergency' fund. As Premium Bonds are relatively instant access there is no reason at all for them not to form a part of this emergency buffer. In an ideal world (!) you would max-out as many as possible...

Not financial advice, the value of investments may fall as well as rise, blah blah blah (in case my regulator is watching..!)

My wife and I both get about £750 a year from 50k of bonds so about 1.5% tax free and the chance to win a million - If you have spare cash its a no brainer way to keep it somewhere safe. An investment advisor some years ago gave me the advice and I am glad I took it.

[SP]

Enjoying the discussion as we'd been talking about this & considering when to catch a falling knife. Should gold be on the list of considerations?

[Southcoastffc]

Much depends on how readily accessible you want funds to be.  Given current rates, if it's 'rainy day' money NS&I return PSB funds in 3 working days and you have a chance of tax-free prize money.  The notional rate of PSB's is only of statistical interest and meaningless to the individual.  My wife regularly (probably 10 months p.a.) wins £25 or £50.   I won £1000 one month last year plus 4 or 5 £50s. If you can/want to put the money away for longer then it seems to me that FFC Berks has sound advice.

[H4usuallysitting]

Have you considered property.... doesn't have to be in London.....

[filham]

Have you considered property.... doesn't have to be in London.....

Watch that BBC1 Programme, Homes Under The Hammer, and you will see that property can be a nice little earner. However property has to be managed so there is both work and risk involved.

[Tonywa]

I like Premium Bonds - but the 'average return' is misleading owing to the top prize being so large. Filham is right, the real return - unless you are lucky - is miserly. In order of preference (ignoring important, investor-specific factors such as age, income requirements, capacity for loss, attitude towards risk and timescales) the 'pots' to consider are typically:

Pension
Investment ISA
Investment portfolio
EIS/SEIS/VCT/BR

Importantly, 'Cash' should be considered first as foremost as a holding place for day-to-day spending, upcoming large-ticket purchases and an 'emergency' fund. As Premium Bonds are relatively instant access there is no reason at all for them not to form a part of this emergency buffer. In an ideal world (!) you would max-out as many as possible...


I too bought 50k of Premium Bonds a year or so ago and I have had pretty well monthly wins of £25 or £50 with one of £1,000. Certainly a better return pro tem than I am getting in my other savings accounts.

Not financial advice, the value of investments may fall as well as rise, blah blah blah (in case my regulator is watching..!)

[SuffolkWhite]

A few years ago I had £3000 in PB's and won £5000. I win on average £300 a year normally in £25's but last year won a 1k. Defiantly better than an Isa for the amount of dosh I have, but again luck involved.

[filham]

A few years ago I had £3000 in PB's and won £5000. I win on average £300 a year normally in £25's but last year won a 1k. Defiantly better than an Isa for the amount of dosh I have, but again luck involved.

Wow, that is good luck, You do mean £3,000 do you because your returns would be above the norm for £30,000.

[Woolly Mammoth]

Today I received through the post from the last monthly draw 5 x £25 premium bond cheques £125 not a bad little earner.

[SuffolkWhite]

Yep Filham  had £3,000 and won £5,000 but I have met people who dont win on PB's. I am quite lucky generally.

[davew]

I would like to offer you some free advice, but as an accountant that is not what I have been taught to do! Not many opportunities around to make a reasonable return on your capital, always high risk options available though!

[filham]

Yep Filham  had £3,000 and won £5,000 but I have met people who dont win on PB's. I am quite lucky generally.

Must try for a seat next to you at the Cottage, I have a strong urge to rub shoulders with you.