student144
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so the most amount of money you can put in is about 20 grand until April 6 and so after April 6th can you put in another 20 grand?
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Muttley79
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(Original post by student144)
so the most amount of money you can put in is about 20 grand until April 6 and so after April 6th can you put in another 20 grand?
Yes but unless you have a lot of money you can get a £1000 interest tax free so an ISA is not necessarily the best choice.
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student144
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(Original post by Muttley79)
Yes but unless you have a lot of money you can get a £1000 interest tax free so an ISA is not necessarily the best choice.
I swear in an ISA if you wait 40 years depending how much you put in you could get more than 100k+ or is that something else
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Muttley79
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(Original post by student144)
I swear in an ISA if you wait 40 years depending how much you put in you could get more than 100k+ or is that something else
You won't invest more than 85K in one ISA because you need to protect it. Interest rates are so low at the moment that you need to save a lot before your interest is more than £1000.

However in a cash ISA interest is always tax-free - maybe read this?
https://www.moneysavingexpert.com/sa...best-cash-isa/
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Etomidate
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(Original post by student144)
I swear in an ISA if you wait 40 years depending how much you put in you could get more than 100k+ or is that something else
An ISA is an umbrella term for an account which is sheltered from various taxes. There are many forms of ISA, including a cash ISA which will have a given interest rate. As has mentioned above, interest rates are very low and you won't generate much money unless you have vast sums. The good aspect of interest, however, is compounding, whereby you get interest on the interest etc. So over long periods of time, you can generate larger interest payments.

As has mentioned by Muttley, you can get better interest rates elsewhere (e.g. 5% a year on fixed amounts). This example is outside the ISA tax wrapper, but you have an annual allowance on interest (depending on your current income tax level) anyway.

I think the ISAs you are referring to in your post are stocks and shares ISAs. This is a means of investing within the stock market that protects your returns from any tax. There is a general school of thought that, on average, the market goes up - so over a long period of time you can average 5-10% a year returns. So yes, you can put in xyz amount and end up with £100k given the right time and market circumstances. You could, however, end with less than you put in if the markets were to fall in value.
Last edited by Etomidate; 1 year ago
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Catherine1973
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I am getting 5% on my 5 year rate setter account and that is an isa.
Longer term, I’d endure the money is in an isa. I’m a higher rate tax payer (well not this year as I am a student) and so it’s only £500 tax free. So having savings already in cash Isa’s means I can ignore them.
Also premium bonds are tax free too on winnings.
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ch0c0h01ic
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(Original post by Catherine1973)
I am getting 5% on my 5 year rate setter account and that is an isa.
You're referring to a P2P ISA, not a cash ISA like the original poster was enquiring about. While they are both tax sheltered, the risk appetite is substantially different.

With cash you are insured up to £85K, there are no such guarantees with P2P lending (ie; if the platform and/or multiple borrowers fail you could lose all of your money).

That is why you are paid a 5% "premium", but I would argue that it is nowhere near enough considering the incredible amount of risk involved (ie; unsecured lending to small businesses with a high risk of default).

Unfortunately the majority of P2P investors don't understand the amount of risk involved, hence they invest in P2P over equities, when the reality is that global equities carry similar risk (if not less) and substantially higher returns (ie; 7-10% annually on average).

Also premium bonds are tax free too on winnings.
They are, but the average return is poor.

They are only really worthwhile if you need to hold large quantities of cash (or highly accessible savings), as a high rate taxpayer that has exceeded their annual interest free limit and ISA limit (doesn't apply to many people).

Pretty much everybody else would be better off putting their money elsewhere.
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Etomidate
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I agree. I also avoid P2P lending as the risk is too high for the returns offered. Also too many nightmare stories of people being unable to cash out for months because there are no buyers for their loans.
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