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Newbie ISA question
willmow
Posts: 13 Forumite
Apologies for posing such a basic question. Scenario:
[*] Let's say I put the max allowed in an ISA now, i.e. this tax year - this ISA has a bonus that will disappear in a year's time and revert to a rubbish rate.
[*] Let's say I open a fresh ISA on April 6, i.e. next tax year.
[*] Am I then able, this time next year to transfer this year's ISA to another ISA to escape the rubbish rate? Or am I prevented from doing so because I will already have opened an ISA for that tax year?
Tx
[*] Let's say I put the max allowed in an ISA now, i.e. this tax year - this ISA has a bonus that will disappear in a year's time and revert to a rubbish rate.
[*] Let's say I open a fresh ISA on April 6, i.e. next tax year.
[*] Am I then able, this time next year to transfer this year's ISA to another ISA to escape the rubbish rate? Or am I prevented from doing so because I will already have opened an ISA for that tax year?
Tx
0
Comments
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You can, as long as the new ISA accepts transfers in.make the most of it, we are only here for the weekend.
and we will never, ever return.0 -
You can transfer as often as you like. Transfers don't count towards your annual allowance.
Worth checking the terms of the old ISA before you transfer, to ensure there are no charges (shouldn't be, for instant access ISAs). Also, always ask the new provider to make the transfer.
http://www.hmrc.gov.uk/isa/faqs.htm#60 -
You would be able to transfer the ISA from the 12/13 tax year to the one you opened in the 13/14 tax year only if the ISA allowed transfers in, if it didn't you could transfer the 12/13 ISA to a new provider but you wouldn't be able to add more to it.0
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Marvellous. So just to be clear:
Once an ISA has been initiated, it either carries on year after year with the original provider, or it can be transferred to other providers (provided they accept transfers in) irrespective of other ISAs that may have been opened in new tax years since. That right?0 -
That's right. You just have to be sure that any transfer stays under the isa umbrella the whole time, so direct transfer from one to another. You can't cash one and reinvest.0
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The only real restriction regards the addition of new, non-ISA, money. Once in, things are much more relaxed
Maybe your best bet would be to:
1) Max out this years allowance, make sure it's an easy access one and don't get too worried about the interest rates, it won't be here for long
2) In April when the best rates are usually about, open a new one with the best interest rate you can find (fixed or easy access) that allows transfers in
3) Ask the new ISA provider to transfer the old one straight away
This way all your cash is in one place with, hopefully, the best rate. Since the FLS there is no guarantee that rates will be great but they can hardly be worse0 -
Once an ISA has been initiated, it either carries on year after year with the original provider
Yes but in practice you would not do that because the interest rates will be totally abysmal after a year or so. You'd always be looking for a new provider who will take in your old ISA funds.0
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