To wonder what on earth I'm missing with regards to ISAs/Savings etc?

[MelAncoly]

I want to save to buy an additional home. Everyone keeps saying to open an ISA so I've spent all morning looking them up.

I can't afford to save more than £100 a month and most of the ISAs are 0.80% ... this means by April I will have earnt something like £1 in interest?!

Surely not? What's the point in it if the "profit" is so small? might as well just open an easy savings account surely?

You won't pay tax on it either (assuming you pay tax anyway). Admittedly they're a bit blah atm with interest rates as they are.

They don't make a lot of sense atm. We get a better interest rate on our current account so saving money in there.

They're only any good if you can manage to top out the allowance every year ATM, with interest rates as poo as they are.

Check MSE for the best ways to save, they have a list of pretty good deals on there usually.

Current accounts have better interest rates at the moment (albeit not as good as they were), so we've stuck with those rather than ISAs. Also interest on any account is tax free up until a certain threshold now if you're a basic rate tax payer. Not sure how it works if you pay a higher rate.

Even if you do have to pay tax you'll probably find the net rate in a current account is better than an isa anyway.

Carney and his pals are hammering savers and have been for years . inflation is over 2% so you might as well piss away money on iphones and sparkly tat, to help the growth that is apparently so essential.

You don't pay tax on the first £1000 of savings interest. Forget ISA's. Open a 5% current account, which is now just nationwide and only for a year.

Savers are screwed in the UK. Sorry.

Cash ISA s are pointless at the moment especially if you're not looking to keep the money there long term and hoping rates will improve

Stocks and shares ISAs are a better bet for some but if you'll need to access the money soon don't take the risk

I only use them for my repair/emergency/buffer fund - money that I want to keep in the short term and have access to instantly. Basically a piggy bank. The only reason I don't just keep it in my current account is for the psychological separation of the money IYSWIM. For money we can do without in the longer term, our 'savings' are in the form of mortgage overpayments just now, as for us it seems to be the best 'return' in the form of interest saved.

Op, if you want to save to buy an additional home, but can only afford £100 per month, you are in for a long wait. Average house price in England is £217,888, with the best ISA rate below inflation, it's going to take you at least 182 years to save up enough - assuming prices don't rise.

You need to look at investment funds or buy individual shares when rates are this low, which they have been for ages now.