ISA fully funded
November 18, 2007I have fully funded my mini cash ISA for this tax year (which ends April 5th, 2008). Since the contents of my piggy-bank didn’t make it all the way to the £3,000 that an individual may “invest” in cash with tax-free returns per year, I used some of the money I got from my grandparents for my 21st birthday.
Now, I fully intend to invest the full amount they gave me in a fairly conservative fund to utilise it for my first downpayment on a house - but as that is not going to happen anytime soon, I figured it might as well earn some tax-free interest in the meantime.
I have opened an ISA account with National Savings & Investments which is paying a whopping 6.30% interest. This is exactly the same amount I get from my Icesave savings account - with the crucial difference that it’s tax free and hence about 20% more in actual money being credited to my account.
The only downside to this account is that interest is only paid annually (at the end of the tax year), while I like monthly interest payments to “watch my money grow”. You also can’t transfer money from existing ISAs, but that’s not a big problem for me as this is the first year I’m making use of ISAs (didn’t really have much money to save as a student…).
Find out more about the account here.
Your best transfer-in option seems to be an account with the West Bromwich Building Society, which will pay a total of 6.50% but enforces a 60-day notice period. I’m not a big fan of notice periods, but 60 days isn’t all that bad. The real downer for this account is that you can only administer it through a branch - no online, phone or postal options at all. This clearly rules out this account for me, as I like being able to query my balance whenever and wherever I want - at the click of a button. But if you can live with restrictions like that (and happen to have a branch of the West Bromwich BS right down the road), you should definitely go for it! 
Otherwise, the next best options seems to be Bradford & Bingley as they offer an instant-access mini cash ISA with 6.05% AER which allows transfers, can be managed online and you even have the choice of getting your interest paid monthly! If that isn’t good news… 
interesting read good post
Cash Advisor | November 27, 2007 | 2:55 pminteresting read
good post
Just one question. Personally my question about West Bromwich
JF | December 16, 2007 | 7:49 pmJust one question. Personally my question about West Bromwich Building Society would be what does that worth in term of financial stability. I am a bit skeptical towards these building society and there risk management. What’s you view on this? Did you make any research?
Hey JF, you've raised a very valid question - especially
Kirsten | December 17, 2007 | 10:34 pmHey JF, you’ve raised a very valid question - especially in the current market conditions. I have to admit that I have not done any research about West Bromwich BS, but then I doubt you could really foresee whether a bank/BS is going to make it through the market turmoil or not - otherwise everyone else would be taking their money away from them immediately.
If you’re really worried about a BS going bust, just make sure you never have more than £32,000 with one bank. This is the amount that the FSA would reimburse you (fully) should a liquidation of the bank become necessary…