I Want To Save £25 A Month In An Isa But The Rates Are Appalling

[gordiescotland1]

HI I want to save £25 a month in an ISA but the interest rates are appalling it hardly seems worth bothering. I thought everyone was encouraging you to save? Any idea what would be the best deal for me I want to save it and not take it out.

[237SJ]

http://www.thisismoney.co.uk/money/saving/article-1583864/Best-savings-rates-Isas-Cash-Isa-accounts-fixed-rate-Isas.html You`re right though - the rates are dire

[jennyjoan]

I am in a 123 Santander account which pays out very good interest but am not sure if you need a certain amount going into the account every month.

[Old_Geezer]

Of course. Interest has been at "stealing from you" level for ages now, as savers are expected to pay for the economic recovery. And if an investment is tax free then they don't need to offer so much to attract savers.

I'd recommend going to one of the dedicated finance sites to see what are the best offers for the day. Or you could help the economy by going out to spend spend spend.

[ToraToraTora]

what with rates being so shit3 I've been saving in premium bond, no interest but you do have a chance of winning something bigish.

[ladybirder]

gordie, forget an ISA. A new Personal Savings Allowance came into force on 6 April this year. You can earn £1k of savings interest and not pay any tax and you get a better rate than in an ISA.
http://www.moneysavingexpert.com/savings/personal-savings-allowance

[EcclesCake]

Wouldn't clearing your debts be a better priority?

There are no good investments at the moment. Clearing debts and coming back to investments would be more sensible to my mind.

[fiction-factory]

Yes, there are several accounts that pay 3% plus. Some require you to have linked accounts (or like Santander charge a fee) but two simple ones to operate are the Leeds Regular Saver at 3.05% (subject to withdrawal limits) and Tesco (3% up to £3000). All are tax free now for 95% of us.

But £25 a month will not give much interest even at 3%- in a regular saver that would be less than £5 for the year

[Jennykenny]

I'm with Tora x 3.
I usually win £25.00 a month, not a lot but always welcome.

[ubasses]

If you can definitely save the £25 a month for a year, go for a regular saver account. You can get rates up to 6%, may have to have a current account with the same Bank.
http://www.telegraph.co.uk/personal-banking/savings/our-four-favourite-regular-savings-accounts/

[fiction-factory]

Yes, i get 6% with M&S regular saver but needed to open a current account (which i just use to feed the Monthly saver.
But even at 6%, saving £25 a month gives less than a tenner in interest at the end of the year so maybe isn't worth the trouble, especially as you now have to switch your current account too.
If you have debts I would definitely pay those before considering a regular saver

[Islay]

I agree with Eccles. Any financial expert will tell you its better to pay off debts and then save afterwards.

[fiction-factory]

Interest rates are pretty low but I doubt they are less generous than they have been for sustained periods in the past in real terms given that the CPI is barely above zero

[Old_Geezer]

Maybe the CPI is claimed to be low, but I don't see that affecting the price of hiring stuff from the local hire shop so why would the financial industry be allowed to reduce their cost of hiring cash using such an excuse ? Savers are put upon IMO. Cash being treated differently to items.

[fiction-factory]

Sorry, I don't understand the relevance of hire shops.The Banks can't do much about the Bank of England base rate which has been 0.5% since 2009 but has been far higher for many years before that.
http://www.bankofengland.co.uk/boeapps/iadb/repo.asp

[Old_Geezer]

Hire tools, hire cars, hire money. What's the difference ? Apparently only hiring money is affected by CPI. No logical justification other than they can. Hiring out anything else and you'll be getting much the same return year on year, hire out your money and you'll get stung every chance the financial industry decides it needs to rip you off to get cheap finance. And yes the Bank of England base rate is a major cause of this saver abuse. When they decide that goes to near nothing savers get their return stolen.

[ToraToraTora]

even the M&S savings regular savings account at 6% (max £250pcm) will earn a max of £97 a year, that's one slight less than average *** up! It's hard work being a saver these days, what do the mega rich do with their dosh?

[Peter Pedant]

h Gordie
basically we are all saying saving is a good thing in itself
and not for the completely crap interest rates you get

at present you could just put it under your bed ...
but still save !

[fiction-factory]

But savers don't get returns stolen O_G if the bank pays 3% and CPI is 0%, but I know you have a deep distrust of banks so I doubt I'll make any difference to your thoughts on this.

[Old_Geezer]

If a bank is paying as low as 3% they are already stealing returns. Do you think you'd get just 3% of your capital outlay hiring out, say, a lawnmower for the whole year ?

[fiction-factory]

I don't know and don't care about lawnmowers and I am not sure gordi mentioned them in his question.