Rob E
Member
Registered: 1st Jan 06
Location: Madeley, Stafford....I want to live back in Wales!
User status: Offline
|
I potentially have a sum of money coming my way and if all goes to plan I want to use it as a house deposit. I wont be looking for a house until July at the very earliest but would like to own one within the next 12 months.
A couple of people have mentioned putting it in a cash ISA account and my parents have recommended I put it in a stocks and shares ISA account. I have never looked at ISAs before and it all seems a bit confusing! Whats the difference between the two?
I don't particularly want to goto the bank to find out as I know they will try and push me into their schemes.
What are the main considerations I should be making when looking at ISAs? Is there a minimum amount of time the money must be in there before you can withdraw it etc?
|
Mertin
Member
Registered: 12th Oct 05
Location: Scotland
User status: Offline
|
quote:
Originally posted by Rob E
I potentially have a sum of money coming my way and if all goes to plan I want to use it as a house deposit. I wont be looking for a house until July at the very earliest but would like to own one within the next 12 months.
A couple of people have mentioned putting it in a cash ISA account and my parents have recommended I put it in a stocks and shares ISA account. I have never looked at ISAs before and it all seems a bit confusing! Whats the difference between the two?
I don't particularly want to goto the bank to find out as I know they will try and push me into their schemes.
What are the main considerations I should be making when looking at ISAs? Is there a minimum amount of time the money must be in there before you can withdraw it etc?
All I know is basically a cash ISA is tax free savings. There is a limit on how much you can deposit a year, because theres only so much savings you can get tax free. I think its in the region of £3-£4k.
I got one with Bank of Scotland, all the interest rates seemed to be the same and only one with real benefits was a fixed term savings account but I was only planning to use mine as somewhere else to keep cash for saving other than having it in my bank account. And was only going to be short term, 1-2 years maybe.
|
Aaron
Member
Registered: 9th Aug 04
Location: Cottingham, East Riding
User status: Offline
|
With an ISA, and like many bank accounts, you earn the interest daily, but it is paid annually. You don’t have to have it in there for a full year, however, you'll only get the interest you're owed from the time the money sits in the bank, and, in addition to this, you might get stung for not keeping the money in there for the full term (a year in most cases)
What are your expectations on the amount of interest you'll earn from the money? I don’t know how much you have of course, but, you're limited to a certain amount of money which you can put into an ISA. I understand that the limit for a Cash ISA is something like £5,200 per financial year, so, at even the best rates of interest, which is around 3%, you probably aren’t going to earn much.
A lot of accounts have different offers and perks, such as the level of interest of course, but, they all boil down to the same at the end of the day.
I don’t know anything about stocks and shares ISA's apart from the fact that you risk getting less money out than you put in! The fact that there is an element of risk involved means that the benefits coming your way if everything goes right is good...meaning that you'll get a better rate of interest. It just depends if you want that risk or now.
Right, I’m going to log out of my "Aaron" account now, and log back into my "PaulJ" one. 
Oh, the money saving expert website is a good one to browse too 
|
JamesMG
Member
Registered: 14th Nov 06
Location: Newcastle-under-Lyme, Staffordshire
User status: Offline
|
There are several different stocks and shares based savings accounts, depending on how adventurous you are. The safest way is to just link the interest rate and that way you can't end up with less capital at the end (unless you withdraw the cash before the minimum term etc)
Either way, I wouldn't recommend anything stocks/shares based for short term as savings as ideally you would only want to withdraw the cash when the stocks/shares are up... Whereas as with a house deposit you will want the cash when you find the house, regardless of the interest amount...
|
|
