The Best Mini Cash ISA Article Discussion Area

Former_MSE_Archna · 10 March 2006 at 2:16PM

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Al_Jolson · 12 March 2006 at 2:42AM

Well, I made it through all 19 pages of the old article and I don't think my question has been asked before.

Can anyone tell me if my assumptions are correct in the following scenario?

I have £3000 which I intend to invest in the 5.2% A&L Mini-cash ISA. However, I will very likely withdraw this money in 2007 as part of a deposit on a new house.
I can see from the A&L website that interest is paid annually on January 1st. So, I am assuming that this means that the £3000 that I am investing now will earn roughly 8 months interest to that point in 2007.
However, if I am going to withdraw this money in say April 2007, would there be any point in me leaving it there for the 3 months after January 2007?

Should I withdraw on 2nd January 2007 and stick it in my ING a/c to accrue the daily interest until April?

Or, will it continue to earn interest for those 3 months, but with that interest not being paid till January 1st 2008?

Thanks.

Deemy · 12 March 2006 at 5:05AM

On account closure, the balance of interest due will be calculated and to the day prior to the date of account closure and credited to the closing balance of the account.

So you would get interest for the 3 months to April 07 added to the balance on closure, and not have to wait until 2008, UNLESS you left the account open with £1 (minimum balance).

Bisoy · 12 March 2006 at 5:09AM

I am no financial expert but I will try my best. The longer you keep your money in cash ISA the more it will earn interest and if you don't withdraw it the better as the taxman can't get hold of it. If you don't want to commit for a longer term then instant access savings account will be your other option such as A & L internet account 5.15% or ICICI also 5.15%. Hope this helps.

Bisoy

MSE_Martin · 13 March 2006 at 1:23PM

Actually I agree with Deemy, but i think there's a little confusion with Bisoys answer

(no offence meant)

Forget the whole 'annual interest' thing - that just means when you're paid it - however if you close the account you will get all the interest you were owed calculated to that date (ie you dont not get the interest just for taking it out early)

Therefore there's no point taking the cash out and dunking it in a savings account, as you're simply going to pay tax on the interest there. Keep it in the mini-cash ISA , as i say in the article its effectively just a "tax free savings account"

martin

webwiz · 14 March 2006 at 9:38AM

My wife & I have several mini cash ISA's with various providers - whoever was offering the best rate at the time. I feel it is now time (OK overdue) to consolidate these. The best current deal is A&L but it seems that I can only transfer previous years, not the current year. So my options seem to be either do the transfer in 2 tranches, previous years now and 2005-6 after Apr 5th, or leave the whole exercise until April. Can anyone confirm that I have got it right, and if so are there any advantages to either option?

sly_dog_jonah · 14 March 2006 at 10:30AM

webwiz wrote:

My wife & I have several mini cash ISA's with various providers - whoever was offering the best rate at the time. I feel it is now time (OK overdue) to consolidate these. The best current deal is A&L but it seems that I can only transfer previous years, not the current year. So my options seem to be either do the transfer in 2 tranches, previous years now and 2005-6 after Apr 5th, or leave the whole exercise until April. Can anyone confirm that I have got it right, and if so are there any advantages to either option?

So long as you don't deposit any money into the A&L when you open it, then there's no problem transferring an existing year's Cash ISA. Basically you open it with a £0 balance and transfer* in the current and previous years' subscriptions. If you are uneasy with anything just get an appointment in branch to open the account and they will repeat the above to you.

* Thats TRANSFER, not CLOSE and RE-DEPOSIT (search the forum or read Martin's articles if you don't know what that means)

schander · 14 March 2006 at 12:56PM

Deemy wrote:

On account closure, the balance of interest due will be calculated and to the day prior to the date of account closure and credited to the closing balance of the account.

So you would get interest for the 3 months to April 07 added to the balance on closure, and not have to wait until 2008, UNLESS you left the account open with £1 (minimum balance).

This maybe a little bit of stupid question but here goes:
If we were to transfer our existing mini-cash ISA's(3 each) to the A+L account and then transfer them next april when the bonus expire's would we get the 3 months of interest to the date we transfer or is it that you only get that 3 months of interest if you 'close' the account.

I have to think, is it worth doing the transfer to get an extra £18 each in interest for our existing ISA's :question:

Thanks
satpal

sly_dog_jonah · 14 March 2006 at 2:47PM

schander wrote:

This maybe a little bit of stupid question but here goes:
If we were to transfer our existing mini-cash ISA's(3 each) to the A+L account and then transfer them next april when the bonus expire's would we get the 3 months of interest to the date we transfer or is it that you only get that 3 months of interest if you 'close' the account.

I have to think, is it worth doing the transfer to get an extra £18 each in interest for our existing ISA's :question:

Thanks
satpal

Whenever a cash ISA is transferred between providers in full the interest up to the transfer date is added before the cheque is sent between the providers. You will not lose your interest, nor have to wait for it. The old account is then closed by the old provider.

If you did only a part-transfer then the interest would not be included in the transfer and of course it would remain active, but you would have to be careful you don't subscribe (deposit money into) the old one in the same tax year as you deposit money into another mini cash isa.

It's worth transferring your ISA pot (if only once a year if you don't like the hassle) to chase the best rates as all those £18s add up over time, or more as the pot grows with your new subscriptions.

Berniesgirl · 15 March 2006 at 10:20AM

Query: Is it currently a good idea to use the £4000 Mini Shares ISA allowance left over once I have opened my Mini Cash ISA? I was considering going for a Unit Trust with a big spread of investments ie., World rather than UK markets. If so then where can I go to get clear & concise advice on choosing a good unit trust for this purpose?
Thanks in advance for any advice offered.

webwiz · 15 March 2006 at 10:28AM

Berniesgirl wrote:

Query: Is it currently a good idea to use the £4000 Mini Shares ISA allowance left over once I have opened my Mini Cash ISA? I was considering going for a Unit Trust with a big spread of investments ie., World rather than UK markets. If so then where can I go to get clear & concise advice on choosing a good unit trust for this purpose?
Thanks in advance for any advice offered.

I assume you would like a safe investment rather than a risky one which might return more. You could look at a Corporate Bond ISA which is pretty similar to cash and which is the only type of ISA to get relief from Income Tax these days. You won't get advice on an amount of this size from an IFA but if you put Corporate Bond ISA into your search engine you will find lots of sites with advice.

The Best Mini Cash ISA Article Discussion Area

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