Forum Topic

ISA's - which one to open

As the deadline is looming, just 2 weeks left, I am looking to open an ISA. Can anyone recommend the highest interest paying isa's.

Asha Smith ● 4790d18 Comments

'I know people who have lost everything investing in the stock market.'They must have had a very weird strategy, such as putting all their money into one company that went bust. You do need to do a bit of homework, though, since, as you say, it can be scary. A typical first-time mistake is to go into the market after it's risen strongly, then there's a fall and they panic, sell at a loss and walk off swearing never to go near the stock market again. A good time to buy was the autumn of 2008 after the heavy falls following the banking crisis.BTW, yesterday's Times had a basic article about Investments Trusts in the Money section.

Susan Kelly ● 4786d

Gold is best for long term???Try this for long term comparison:  Stocks vs. Bonds vs. Goldhttp://www.joshuakennon.com/stocks-vs-bonds-vs-gold-returns-for-the-past-200-years/

Charles Campbell ● 4786d

Absolutely right, diversify. But I did say to buy gold if you're in it for the long haul. If you don't know anything about stocks and shares it is a really scary place to put your money.Bottom line is I know people who have lost everything investing in the stock market, and I do not know anyone who has lost on gold, if they are happy to wait for the generally upward trend to manifest. Just my thoughts, and experience.And the whole idea about buying physical gold, rather than notional and ETFs is that you have it, in your hands, as it were. I bet there are many Cypriots who wish their wealth was in their hands, rather than in the banks.

Judy Jaafar ● 4786d

The usual advice is not to put all your eggs (or gold bricks) in one basket. The safest strategy is a range of investments, covering different types of asset and with a good geographical range.If you had bought gold a year ago, you'd be nursing a loss now. Whereas if you'd bought, for example, a FTSE tracker, you'd be up a good 10%.

Susan Kelly ● 4787d

Yes, folks. If you have any cash to spare, buy gold, or silver. Prices have been a bit volatile of late, to be expected when investment banks are artificially manipulating prices, but precious metals are invariably on an upward trend, if you are willing to wait. Year on year they will out-do pretty miserable ISAs. Remember also you have a tax- free allowance on investments as well as earned income.In theory, what has happened in Cyprus can happen anywhere in the EU, or the world indeed. Taxing savings is not beyond the remit and guile of any government we have here, and is potentially not just a Eurozone issue. Buy gold coins and keep them in a safe deposit box, independent of any bank, or under your mattress if you prefer. Can't go wrong, or at least I don't think so, being that as I have no qualifications as a financial advisor. I must stress that, and it is entirely up to you what you do with your savings. Yikes, and good luck! BTW gold sellers are readily to hand on the Internet. The price is starting to rise again.

Judy Jaafar ● 4788d

Bit of info about Investment Trusts early in today's Money Box Live:http://www.bbc.co.uk/programmes/b01r9r47first call, after he's finished wittering on about his life story.

Susan Kelly ● 4789d

I hope the fate which has been inflicted on the Cypriots does not happen here. Some Gold coins may have diminished some of their problems.

George Knox ● 4789d

You can also do a stock ISA and still invest your funds into a Money Market fund which invests in short dated investment grade bonds, mostly gilts. E.Q. Goldman Sachs Money Market Fund (Investment Grade rated). Funds are ring fenced from Goldman's own funds.  Yields aren't great now, but rise when interest rates increase.  You also have the option then of moving the funds into equities (individual or collective) as others have recommended.

Charles Campbell ● 4789d

Asha, whatever you do, don't take advice on a shares ISA from any high-street bank. Their advice is notoriously awful. I think most of them have stopped offering financial advice now, but just in case ...

Susan Kelly ● 4789d

I think Santander are offering 2.8% and you'll be hard pushed to do any better.The banks are getting money from the government to lend out so don't need it from savers, hence the recent falls in interest rates.Incidentally, I got a letter yesterday about a fixed-rate cash ISA which matures in a couple of weeks. All the options I was invited to choose from involved another ISA with the same provider or having the money returned to my bank account, thus losing the ISA wrapper. Not a mention of the possibility of transferring it elsewhere. Had to write them a 'none of the above' letter.

Susan Kelly ● 4789d

Thanks everyone. I will make a visit to some of the banks in Ealing today and talk to someone. By the way, some current accounts are paying 5% Gross whereas ISA's are only a measely 2%. I would have thought they would have increased the rates on ISA's. Last year they were 4%.

Asha Smith ● 4789d

Asha, this is good sound advice from Miss Susan.  Investment Trusts are themselves a small selection of shares in a spread of companies. They have proved to be a sensible way for "amateurs" like myself to invest in the Stock Exchange and the like. Do seek professional advice though as to the precise ITs to invest with, then you'll be reasonably safe.

Gerry Tan ● 4790d

Regarding b), like Gerry I always go for Investments Trusts rather than Unit Trusts (Or OEICs, as they now are) since the charges are lower. They are technically shares and are bought just like single-company shares. If you use an online dealing platform, dealing costs can be as low as £10, I believe, although my platform, Alliance, charges £12.50 per deal.

Susan Kelly ● 4790d

Based on my experience over the past five years or so, I can say with a reasonable amount of certainty that there is no point whatsoever in putting your money into a cash ISA if you are a basic rate taxpayer or pay no tax at all. If you're a higher rate payer, then it's probably still just about worth it but the fact is that the best savings rates are on non-ISA accounts. We have got to the point where, unbelievably, the best rates are to be found on CURRENT accounts.My advice is to invest in shares but decrease the risk by: a) drip-feeding your investments i.e pay a certain amount every  monthb) not investing in individual shares.  Unit trusts - baskets of different shares/bonds - are inherently less risky. Spreading your money over several funds also lessens the risk. This diversification could run along geographical lines, be sector-driven, income vs growth, actively managed vs passive etc.c) assuming a timeline of at least five years, the theory being that you can reasonably expect to have achieved a decent average return the longer you hold the investment.If you go down the funds route, invest via a funds supermarket such as Hargreaves Landsdown or Cofunds (I use the latter). These guys will get you a discount of close to 100% of the initial fund charge, which can be up to 5.5%.Good luck!

Alex Weel ● 4790d

No equity shares are 100% safe!  They can go down as well as up. Do take advice from your bank manager or financial adviser. Don't take it from me Asha.

Gerry Tan ● 4790d

In the past I've always opted for the cash one's simply because I have no idea what the equity ones entail. Is the money safe in an equity one. Which one would you recommend?

Asha Smith ● 4790d

What kind of ISA? A cash one or a share one?  I tend to favour the equity ones, preferably an Investment Trust kind from a large and established IT company. When dear old Mr John Major introduced the PEPs, they were the ideal investment vehicles to go for, but they(PEPs)have been diluted since his days sadly. But still worth having imo.

Gerry Tan ● 4790d

Follow the consumer experts:http://www.moneysavingexpert.com/savings/best-cash-isaWith the Bank of England handing out BILLIONS on it's 'funding for lending' deal to banks, no bank or building society is interested in competing for your savings.

Mark Vale ● 4790d