Best savings account?
- Thread starter Merlin5
- Start date
Underboss
that doesent answer my question
Question, why are the final payments different, the 6% one is LOWER at the same monthly deposit ?
I'm currently maxxed out on my ISA, 40k over 2 years, so I banged 50K into premium bonds.. I'm expecting my ISA will out peform my premium bonds, as the maths just doesn't add up, But If I don't win big on my premium bonds before next April, I'll pull 20k out of them to re-invest into a cash ISA, or maybe as S&S ISA... I'd rather the guaranteed income from the ISA, even if it's only 4%.
It depends on the savings account... to get the best rates you are limited to how much, and how fast you can invest in them, and you might have to pay tax on your gains as its a 'normal' savings account rather than a cash ISA which is tax free.
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"Based on accounts opened on the first of March, with 12 monthly deposits of £250 made on the 25th of
the month (which is the maximum you can pay in each month)."
Looks like the TSB one has 24 days before the interest starts, whereas the YB one starts the interest on day one. Both calculate interest daily. Maybe a sneaky way to reduce the amount paid while advertisng a higher (6%) rate.
This is just my guess though as to why the amounts are different - could also be a typo / error.
NB, I think these monthly one year savers are a bit misleading. Yes it's 6%, but because you're limited to the amount you can save each month, the actual return is more like 3%. If you already have the £3k, better to just find a higher interest account, or a fixed term deal. If you only have the money on a monthly basis, it's still better to find a higher rate savings offer.
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Underboss
I know it isn't. But this should be obvious.
They are regular savers.
They are the best thing for that 250 a month.
On the different amounts of interest.
Same as lloyds vs FD.
Lloyd's is open for 12 months. But you can put 250 in at any day in the month.
Ie if you open it on 31st of Jan.. You can put 400 in on 31st.
Then 400 on 1st Feb.
But it'll close on 30 of Jan the next year. So basically it starts with 800 vs 400.
Where as FD if you open on 31st you can only put it in on last day of each month.
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Soldato
Anyone have any educated guesses on when ISA rates may be lowered? My ISA matures in November, I can either upgrade early to go on 1 yr fixed 4.0% or 2 yr 3.8% which is a bit low compared to others offering 4-5%.
You would think that ISA would outperform premium bonds, however, in the past 3 months
I have accumulated (in my ISA) - 3 x monthly interest payments of £153 per month - so approx £459 interest, i have about £40k in and im on my limit for this tax year
in the past 3 months i have won £1075 on premium bonds i think
- £500 winning, £200 winning, and then this month £375That being said, premium bonds is not a guaranteed win, ISA is guaranteed interest.
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Why did you not choose a S&S ISA in the first place? If you can leave it in there long term history has taught us that it will outperform ISA savings rates.
Zopa is higher % if you fix than that, from what I can remember. Marginal but higher than 4 for sure
Because that's not my entire portfolio... I have an additional 100k in a vanguard global equity fund, a 60/40 mix of shares and bonds as I'm quite risk adverse.
Go for a variable rate flexible cash ISA...mines still @ 4.8% and tracks the base rate.
I can't see the base rate dropping much at all in the next year or two... the days of the base rate being sub 1% are well and truly over - a lot of people got used to that th9inking thats how it should always be, but it's actualy very abnormal.
Soldato
Likely to see a 0.25% drop at the next meeting in Nov, then another 0.25% after that. So could be 0.5% lower before the end of the year.
there is always a possibility that luck will outperform anything.You would think that ISA would outperform premium bonds, however, in the past 3 months
I have accumulated (in my ISA) - 3 x monthly interest payments of £153 per month - so approx £459 interest, i have about £40k in and im on my limit for this tax year
in the past 3 months i have won £1075 on premium bonds i think
That being said, premium bonds is not a guaranteed win, ISA is guaranteed interest.
Yes you just got lucky... You might have been really lucky and won a million quid but the odds of that are tiny.
You can only really compare 'average luck' in PB to your ISA... Over time the ISA will outperform premium bonds if you have average or below average luck.
I have just calculated my premium bonds winnings, Oct 2023 > Oct 2024
£2375
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Which is around 4.75% return with 50k
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So you have done slightly better than you should have, with average luck.
My cash ISA is paying 4.8% currently.
If interest rates drop then premium bonds would become mathematically a more sensible choice, but you can only hold a max of 50k on them.
With an ISA you can add 20k per year and have a guaranteed profit.
For example I invested 40k in a cash ISA, 20k at the end of March and another 20k at the start of April...
In 7 months I've made approximately £1030.00 but that's guaranteed tax free income.
So if we exrapolate that, my ISA has out-perfomed your PB over a 12 month period, as your holdng 50k in your PB and I'm 'only' holding 40k in my ISA.
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'Over time' though cash ISA and PBs are both very poor. If you ask me too many people keep large sums in excess of their emergencycash buffers in savings vehicles because of fear of losing money and long term its financially crippling.
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Depends on your overall portfolio and risk appetite...
Currrently I have :
50k in PB
40 easy access flexible cash ISA 4.74%
100K in a good savings account @4.87%
100k in a vanguard global equity fund 60/40
I think I'll probably pull 20k out of my premium bonds next april and put it into my ISA, or i might pull that 20k from my savings account, i'll do the maths closer to the time.
And of course will have to see what happens in the autumn budget from the government
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