Aer?

[Robotstar5]

Just a shot in the dark in case we have some financial wizards on here. Looking at 2 savings accounts, one offers 3.04% AER and the other (an ISA) offers 2.00% AER tax free. Does the tax free bit account for 1.04% or is one better than the other?

 

[Porschemaniac]

Hi Robostar,

Generally speaking AER (Annual Equivalent Rate) is your best benchmark.

Provided that you haven't used your ISA allowance (£5100 if you are over 50, or £3600 if you are under) then an ISA is usually your best bet - as they make the best use of tax breaks.

There are a lot of variables, so the best bet is always to shop around. Like I say, ISAs make a lot of sense, but for a more pragmatic view on what your return may be, you could always use an online calculator - such as this

You could always ask the bank to project what your return would be on, say £1000, over the period that you wish to invest for - that'd give you a pretty good guide. If their financial advisor can't calculate it, then find someone who can.

 

[KTMMICK]

Just a shot in the dark in case we have some financial wizards on here. Looking at 2 savings accounts, one offers 3.04% AER and the other (an ISA) offers 2.00% AER tax free. Does the tax free bit account for 1.04% or is one better than the other?

Check out Scottish Widows they are offering better rates than that at the minute.

 

[Robotstar5]

Thanks for the replies, for various reasons I only have the choice of the stated options and just wondered if tax free interest accounted for the 1.04%.

 

[weldequip]

You'll never make any money on savings accounts - particularly with interest rates at the moment. Buy some shares. They're up & down like a Yoyo & you might actually loose money short term, but if you choose a quality stock you'll get annual dividend payments of at least twice bank deposit rates + the longer term upside of the share price

 

[runnach]

I moved some ££'s to Santander International Equity Fund. Got my first 6 month statement yesterday, lets just say I'm pleased

Part stocks and shares ISA + other shares

Although can work the other way............

 

[malcolm]

On the other hand I reckon now is probably the worst time to buy shares - they are sitting quite high at the moment and the values aren't really based on anything other than what other people are prepared to pay for them. If I had any I'd cash them in then buy them again in a couple of years.

Money Saving Expert is a fair place to look - but the accounts listed will lower their rates over a year or two so you have to spend a day each year moving your money around.

 

[snowcat]

premium bonds arnt bad if you have a bit to tuck away 2.00% and 3.00% are really going to return F/A unless you have serious cash..

I had an AA saver at 5.5% thats now paying less than 2% so most of these A/C go down it appears like a yo-yo....

If you have money to tie up a bond of sorts is going to be a better bet..... than one of these terrible paying instant access A/C

 

[runnach]

Yes they are high, share price going higher by the day, odd slide by a few points on other days. I was going to do this in April when price was a lot lower, anyways, I was busy with other stuff. Personally with setup I have, funds are managed on international markets.

My son monitors his own share holdings, he has time to monitor daily, where I don't, hence my choice of having it managed by others. No complaints from me to date.....