Thursday, 24 January 2008


Okay, so you’ve worked out how much you can spend on Christmas (2 times your monthly disposable income), but just where will you put this money? Well, every little bit helps, so you will want to get some interest on it (well, I would, anyway!).

So, you can decide early on in the year to dump your disposable monthly cash in a savings account for 2 months running, then just leave it to gather interest, or you could divide the sum between 10 months and put a bit in every month – it’s up to you and depends on whether you think you may have any other unexpected costs. Of course if something untoward happens you can always draw it out again – no, don’t even think it!

So whichever way you save for Christmas (or even that holiday you so badly need) where are you going to put your money?

It’s fairly straightforward – if you have less than £3000 per year to save (£3600 from next April), you can put it in a mini cash ISA (Individual Savings Account) in any bank or building society. This will mean that you will pay no tax on the interest. You are only allowed to hold one ISA and are identified by your national insurance number.

Typically, online ISAs pay higher interest rates – but both telephone, branch and online account rates vary and can be anything up to 6.26% (Money Supermarket today’s rates) so do your research and take your pick. If you leave £500 in an ISA for 1 year at 6.25% at the end of that year your £500 will have become £531.25 – which may not sound like much – but at least you haven’t had to do anything for it!

More info

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