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Bodger

ISA's ?

The current deals for our ISA's have recently come to an end and the return on them has gone down from 1.75% to 0.9% The deals that we set up last time we moved our cash seem to have disappeared.
There are better deals to be had but you have to pay a penalty if you take money out of them before the term agreed finishes.
We may have to use ISA money in the near future if and when we move house, so can anyone come up with an ISA better than the one's I've mentioned? I do realize that its a lean time for investors at the present.
dpack

last one i had was a share one that lost about 15% so im not very keen on em

would a bs "high" interest deal work for you ?
Rob R

Have you thought about crowdfunding?
Treacodactyl

Some of these offers may be suitable:

http://www.moneysavingexpert.com/savings/best-cash-isa
Lorrainelovesplants

On a similar theme to Bodger's - Im looking to invest a large amount of money on mum's behalf. Ive been told at the Nationwide that if she croaks before the end of the term (ie if we take out a 5 yr investment and she dies in yr 3 for example) there will be no penalty.
So, as the bank account she currently has (current ac) is paying 0.05%, I m looking to move a substancial amount to something safe, longish term and better rate.
Anyone got any suggestions? Apart from crowdfunding Rob.1 Laughing
Rob R

I don't know why you're laughing? But if you wanted a more conventional arrangement, with middlemen taking a cut, Zopa also offer decent rates.
pollyanna

If it's for Mum it must be safe, safe, safe.

I have no idea of her age, but if she is elderly it must be safe, safer, safest!
JB

Cash ISAs are appalling value, usually paying below the rate of inflation. Equity ISAs are a much better option unless you expect to have no control over when you sell.
Lorrainelovesplants

Rob - I can hardly invest my mothers money in a scheme that will basically pay her back in meat - I mean she stopped eating a few months back. Id end up in jail! Laughing

I realise the cash ISA thing is crap right now, but am looking at wider investments also - government bonds, anything really.
Bodger

Sad I know but we stick any loose change we get into a gallon whisky bottle and then when there's a hundred quid in it, we buy Premium Bonds.
We drank the contents years ago, so at least the whisky hasn't been ruined but those bonds have proven to be worse than the ISA's, with just the one win of £25.00.
We've considered buying a second property but we're probably a few quid short and at our tender age, do we don't really want the hassle? In the meantime, the value of our savings is diminishing year on year.
Rob R

Rob - I can hardly invest my mothers money in a scheme that will basically pay her back in meat - I mean she stopped eating a few months back. Id end up in jail! Laughing

I realise the cash ISA thing is crap right now, but am looking at wider investments also - government bonds, anything really.


Not all crowdfunding pays back in meat and small businesses are crying out for funding right now. We can't complain about bankers and the government then continue to pay them all our capital to do with as they wish. As I said, the Zopa investment is a more regular form of peer to peer lending and far better rates than ISA's.
Bodger

I know very little about crowd funding and that's probably because I haven't read the threads on the subject but being a conservative with a little 'C' in life, aren't businesses large and small going down the pan everyday?
Rob R

Well, yes, that's one of the reasons savings are so rubbish. Also banks are pulling funding on perfectly good businesses to add to their profits.

It helps if you know and trust the business, but doesn't have to be that way - I've received funding through Twitter from someone I've never met for the other half of the weigh system funding, and cash basis borrowing through family loans have helped build some of the buildings on the farm. I got a bank loan for the office but now that's paid off I don't intend going bank to bank loans.
Bodger

In the meantime, I'm lending my money to the banks for less than nothing and tax exempt interest on nothing is still nothing.
Nicky Colour it green

money saving expert is a good place to start looking
Treacodactyl

Sadly it is very much a borrowers market and it's likely to continue for years to come.

One thing worth remembering is savings rate vs inflation, although your rate may have gone from 1.75% to 0.9% as the inflation rate has fallen from 4% to 2% you're actually better off (although that does depend on what you're saving for).

With premium bonds the prize fund is based on an interest rate (currently 1.3%) so you can use that to compare to other rates.

As for savings rates vs funds or investments, generally as the rate of return goes up so does the risk. Personally I can't see the stock market going up in the next couple of years as much as it has done in the last few years.

If you've got a large chunk to invest I'd seriously consider seeing a financial adviser if you don't know what you're doing, but read up on what to expect first so you don't get stung on charges. There's plenty of DIY guides out there.

And here's something on peer-to-peer lending: http://www.moneysavingexpert.com/savings/peer-to-peer-lending
Rob R

Here's another MSE link that I came across last night on the subject of Premium Bonds; http://www.moneysavingexpert.com/savings/premium-bonds
Nick

Rob - I can hardly invest my mothers money in a scheme that will basically pay her back in meat - I mean she stopped eating a few months back. Id end up in jail! Laughing

I realise the cash ISA thing is crap right now, but am looking at wider investments also - government bonds, anything really.


Not all crowdfunding pays back in meat and small businesses are crying out for funding right now. We can't complain about bankers and the government then continue to pay them all our capital to do with as they wish. As I said, the Zopa investment is a more regular form of peer to peer lending and far better rates than ISA's.

You should never treat crowdfunding as an investment. You do it, fully aware that you could lose everything, and have no comeback.
Rob R

What definition of 'investment' are you using? Nick

Getting a financial, increased return on your money. As he asked for. Rob R

Yes, that seems to be exactly what crowdfunding can be.

Quote:

in·vest [in-vest] Show IPA
verb (used with object)
1. to put (money) to use, by purchase or expenditure, in something offering potential profitable returns, as interest, income, or appreciation in value.
Rob R

Martin Lewis has just sent me this;

Quote:
It's the final ISA countdown - de-de dur-dur...
Warning: Use it or lose it. Only ONE MONTH left to take advantage of this year's tax-free savings allowance

Don't get scared off cash ISAs - they're not complex, they're just savings accounts where you don't pay tax on the interest. You can put £5,760 per tax year in, and after that the money stays tax-free year after year. So if you've not saved any cash in one since 6 Apr 2013, and have savings, consider using yours ASAP. Full info in Top Cash ISAs, here are the best buys...

Get 1.75% AER variable with the ability to take money out. Many wrongly believe you need to lock money away in a cash ISA. National Counties (min £100) pays 1.65% & allows unlimited withdrawals. Britannia's a higher 1.75% (min £500) but only allows 2 withdrawals a year; though you can transfer in past years' ISAs to up their rates.
Lock cash away to earn up to 2.75% AER. If you don't need to access the cash, Top Fixed Cash ISAs pay more. Though beware locking in, in case other rates bounce back. Top 1 & 2-yr fix: Britannia 1.85% and 2.05% (2% and 2.2% for existing custs). 3 yr: Coventry BS 2.75% (no transfers).
Should I use a 3% AER easy access savings instead of an 1.75% ISA? If you're willing to switch to Santander's 123 bank account (2nd top for service in our poll), it pays 3% if you've £3,000-£20,000 in it. Does this beat an ISA? Often, yes. It pays 2.4% after basic rate tax, 1.8% after higher rate. Yet by putting cash in an ISA you protect it from tax year after year. So balance higher rates now versus building up a bigger tax-free savings pot each year.
Does your local credit union offer up to 3% AER? A few of these local non-profit savings and loan co-ops offer higher rate cash ISAs, eg, Voyager Alliance (open to those working in transport) pays 3%. See Credit Unions guide.
Cash ISA golden rules. 1) Monitor your rate. If it drops, ditch & ISA transfer. 2) You can use your ISA allowance for share investing too - see the ISA Guide for more. 3) ) All accounts listed have full £85k savings safety.
Nick

Yes, that seems to be exactly what crowdfunding can be.

Quote:

in·vest [in-vest] Show IPA
verb (used with object)
1. to put (money) to use, by purchase or expenditure, in something offering potential profitable returns, as interest, income, or appreciation in value.


Can be. But isn't, often enough, or convenient enough to offer a better return than a cash ISA to someone who wants security, and fast access to his money. It's a daft suggestion for Bodger.
Rob R

Yes, that seems to be exactly what crowdfunding can be.

Quote:

in·vest [in-vest] Show IPA
verb (used with object)
1. to put (money) to use, by purchase or expenditure, in something offering potential profitable returns, as interest, income, or appreciation in value.


Can be. But isn't, often enough, or convenient enough to offer a better return than a cash ISA to someone who wants security, and fast access to his money. It's a daft suggestion for Bodger.

It's not a suggestion for Bodger - it's for everyone who doesn't know it exists as an option. It is an investment, though.
Nick

My mistake. It was the way you posted it in his thread, ten minutes after he asked for investment options that threw me. I didn't realise it wasn't related to his question. Rob R

Well obviously it could be open to Bodger if he wished, but as it was so clearly not what he asked for I didn't think he'd go for it. And he's asking for ideas - I'm assuming, because he has money, that he's not going to take the second, or any, suggestion from a bunch of people on an internet forum, but if it suits him, he will look into it further.

If you want instant access to your money, you're going to get a crap rate, if you can be a little more flexible/more risk, there's better returns available. You're never going to get both though. Zopa offers some safety, according to Lewis,but it does mean locking it away for a bit longer;

Money Saving Expert wrote:
How quickly can you withdraw money? You get monthly repayments. But if you need your capital back before your term ends, its not-that-rapid Rapid Return system takes three to five days to get you the cash. It'll cost you an additional 1% fee.


Crowdfunding may have started out as a high-risk trust based exercise in the film industry but there's working going on, to really push it forward as a serious challenge to bank lending, at national & European level, in various sectors.
Lorrainelovesplants

Im just posting to say that this morning I had a good look at crowdfunding on the net and Im more interested - not for mums money (my brother will never agree to it), but for my own savings - if I can invest, say £1000 in something, assure myself that its going to be reasonably safe, and get a bigger return than at the BS, AND help someone out then Im happy to risk it.

I will need more info, but I just thought Id post to say, Im open to the idea now that Ive had time to look at it.
wizz

Saw something on the news this morning about regulation being introduced to the crowdfunding market, so perhaps a bit more reassurance for those of us who are quite risk averse. I think the issue in all investments when you want to keep the risks low(er) is that you spread your investment - hence your risk... Nick

5Live were talking about this this morning.

Clearly, it's a broader market than it used to be. There's never a guaranteed return, but by spreading out in a portfolio the guy interviewed suggested he made 9% before bad debts, 6% overall. No timescales given, but it's not a fast return, and it guess you rarely have control over when you get your cash back, unless it's equity in a traded company.
Rob R

The same goes for receiving crowdfunding - you're a creditor of the company/individual & if something happens to them, the family can want the money back, so don't put all your eggs in one basket without some decent legal contracts. Most crowdfunding is no more than you'd pay for the product/services of the company, any bigger than that and it's too much risk. You should agree & confirm your terms & conditions before investing/receiving though - don't wait until afterwards. You're more likely to be able to get your money back if the money is being spent on assets, rather than services - I wouldn't invest in anything that involves spending the money on 'marketing'. Bodger

I'll get my financial advisor AKA the Mrs to have a look at this post.

Martin Lewis has just sent me this;

Quote:
It's the final ISA countdown - de-de dur-dur...
Warning: Use it or lose it. Only ONE MONTH left to take advantage of this year's tax-free savings allowance

Don't get scared off cash ISAs - they're not complex, they're just savings accounts where you don't pay tax on the interest. You can put £5,760 per tax year in, and after that the money stays tax-free year after year. So if you've not saved any cash in one since 6 Apr 2013, and have savings, consider using yours ASAP. Full info in Top Cash ISAs, here are the best buys...

Get 1.75% AER variable with the ability to take money out. Many wrongly believe you need to lock money away in a cash ISA. National Counties (min £100) pays 1.65% & allows unlimited withdrawals. Britannia's a higher 1.75% (min £500) but only allows 2 withdrawals a year; though you can transfer in past years' ISAs to up their rates.
Lock cash away to earn up to 2.75% AER. If you don't need to access the cash, Top Fixed Cash ISAs pay more. Though beware locking in, in case other rates bounce back. Top 1 & 2-yr fix: Britannia 1.85% and 2.05% (2% and 2.2% for existing custs). 3 yr: Coventry BS 2.75% (no transfers).
Should I use a 3% AER easy access savings instead of an 1.75% ISA? If you're willing to switch to Santander's 123 bank account (2nd top for service in our poll), it pays 3% if you've £3,000-£20,000 in it. Does this beat an ISA? Often, yes. It pays 2.4% after basic rate tax, 1.8% after higher rate. Yet by putting cash in an ISA you protect it from tax year after year. So balance higher rates now versus building up a bigger tax-free savings pot each year.
Does your local credit union offer up to 3% AER? A few of these local non-profit savings and loan co-ops offer higher rate cash ISAs, eg, Voyager Alliance (open to those working in transport) pays 3%. See Credit Unions guide.
Cash ISA golden rules. 1) Monitor your rate. If it drops, ditch & ISA transfer. 2) You can use your ISA allowance for share investing too - see the ISA Guide for more. 3) ) All accounts listed have full £85k savings safety.
Rob R

Martin Lewis has just sent me this;

Quote:
Quick. 2.9% AER cash ISA loophole
Take advantage of two cash ISAs that you're meant to lock cash away in, but let you escape if needed

A cash ISA is just a tax-free savings account. If you've not opened one since last April, you've until 5 April to save up to £5,760 so the taxman can't bite your interest. Most ISA rates aren't great, but we've spotted two fixed cash ISAs with manipulatable terms. Warning: Go quick. Last time we found a trick like this, it was pulled hours after we put it in the email.

The 2.9% AER cash ISA. Newcastle BS's 5-year 2.9% fixed rate ISA (min £500) accepts new money and transfers. Like all fixes it's designed for locking cash away, but 5yrs is a long time to do that, especially as interest rates may bounce back.

By law, technically even fixed-rate cash ISAs must allow you to access the cash, so instead they levy hefty interest penalties. Yet with a penalty of just 120 days' interest, Newcastle's is low for a long fix & it allows partial withdrawals (the penalty's only on what you withdraw). So the trick is to get this, even if you may need to access your cash much earlier.

If you withdraw after just a year, after the penalty you'd have got an avg rate of 1.95%, compared to 1.75% easy access, or 1.9% in the top 1-yr fix. Withdraw after 2 yrs and it's 2.4%, compared to 2.05% in the top 2-yr fix. If Newcastle's pulled, Coventry BS 2.75% 3yr fix (new money only) also has just 120-day penalties, though you need to close it to withdraw.
1.65% AER variable with unlimited access to cash. If you'll need to dip into your ISA regularly, National Counties' Online Cash ISA allows unlimited withdrawals, paying 1.65% AER. Slightly boost this with Britannia's Select Access ISA, paying 1.75% AER if you don't withdraw cash more than twice a year (0.25% if you do).
Does Santander 123's 3% beat the best easy-access cash ISAs? Read Martin's new Santander v ISAs blog.
Cash ISA golden rules. 1) Monitor your rate on variable deals. If it drops, ditch & ISA transfer. 2) NEVER withdraw cash to transfer. Ask the new provider to shift it for you. 3) All accounts listed have full £85k Savings Safety.
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