Totally Confused Newbie - Questions about ISAs inside

moneyballs2

Hi,

I am totally newbie to savings accounts and ISAs and have a few questions.
I am nearly 16 years old and have been recommended to open an ISA and put as much as I can in it as soon as I turn 16. I have around £2,000 that I am going to put into savings when I turn 16.

Questions -

1) Does the money in an ISA roll over? In other words, if I have £1,000 in it for one tax year, and then for the next tax year I add the full £3,600 does that mean my total will be £4,600? Or do I have to withdraw the £1,000 I had originally and re-enter the £3,600. I'm confused on this as people are recommending I get an ISA before I start making enough to pay tax (how will this benefit me more?)

2) Which is the best ISA for me? I won't be withdrawing out of it and will probably be able to add about £100 a month (I won't be hitting the £3,600 allowance unless I win the lottery or something )

3) Do I need a parent to come with me when I open one of these (Being 16 years old)

4) Would it be better me putting £1,000 in the ISA and the other £1,000 in n current account with fixed 1 year 10% interest rate. Or putting £2,000 in the ISA to begin with? (What are the longer term benefits?)

Thanks (and sorry for the n00bish questions) I usually understand things, but all this banking stuff just goes right over my head.

debbie42

moneyballs2 wrote: »

1) Does the money in an ISA roll over? In other words, if I have £1,000 in it for one tax year, and then for the next tax year I add the full £3,600 does that mean my total will be £4,600? Or do I have to withdraw the £1,000 I had originally and re-enter the £3,600. I'm confused on this as people are recommending I get an ISA before I start making enough to pay tax (how will this benefit me more?)

2) Which is the best ISA for me? I won't be withdrawing out of it and will probably be able to add about £100 a month (I won't be hitting the £3,600 allowance unless I win the lottery or something )

3) Do I need a parent to come with me when I open one of these (Being 16 years old)

4) Would it be better me putting £1,000 in the ISA and the other £1,000 in n current account with fixed 1 year 10% interest rate. Or putting £2,000 in the ISA to begin with? (What are the longer term benefits?)

1) It accumulates. You get an allowance for each year. So after 2 years you could have £7200, plus interest.

2) Look for the best rate that suits your requirements. There's a thread on here with the current available rates.

3) I wouldn't have thought so.

4) Compare the rates net of tax (if you pay it). In your example you;'d probably get more interest from the 10% account.

moneyballs2

I don't pay any tax yet so the 10% would be better, but in the longer run I have a higher accumilation in the ISA which is tax free.... But I think short term will be better, as I wouldn't be able to enter the total £3,600 anyway.

Thanks for clearing up the ISA thing, I thought it accumilated, but wasn't 100% sure.

Cheers

debbie42

No problem. If you aren't a tax payer then I'd whack as much as you possibly could onto the 10% as that's a good rate, then fill up your ISA when you can. Make sure you fill in an R85 form to get your interest paid gross on the savings (not needed for the ISA).

Badgi

I thought I'd add to this thread rather than starting a whole new thread.

I've got £2000 I want to put into an ISA, but I'm totally confused on what ISA to get, a lot of the higher rate ISA say "No Transfer In" does that mean once I put my £2000 into the ISA I can't add anymore money?

Totally confused, I don't have a head for these things, any advice on my situation or what ISA to go with would be most appreciated.

Crabman

Badgi wrote: »

I thought I'd add to this thread rather than starting a whole new thread.

I've got £2000 I want to put into an ISA, but I'm totally confused on what ISA to get, a lot of the higher rate ISA say "No Transfer In" does that mean once I put my £2000 into the ISA I can't add anymore money?

Totally confused, I don't have a head for these things, any advice on my situation or what ISA to go with would be most appreciated.

Hi Badgi & welcome to MSE

The 'transfer in' they refer to is from an existing ISA. For example, say you had £3000 in an ISA from last year and you wanted to move that to an account with a better interest rate - you wouldn't be able to transfer that to a 'no transfer in' provider.

About adding further cash later - that's not a problem, you can put up to £3600 into an ISA each financial year.

Therefore, as you're putting new money in, you don't need to worry about the transfers bit. Take a look at the Cash ISAs article and ask any questions on the discussion thread (link at end of article)

Badgi

Many thanks Crabman. :beer:

gcolj

Hiya. I also thought I'd add my question on here as opposed to opening a whole new topic.

Basically I have some spare cash and want to open an ISA. I can put in the full 3.6k. I've been looking at a Halifax Fixed Rate ISA but have one question.

the T&C are;

Minimum opening balance - £500 - I can pay full 3,600
Maximum balance - up to £3,600 in any one tax year - Can I pay another 3,600 into the same ISA at the start of next tax year?
No withdrawals - I can managae that
No additional deposits - after account opening - Is that ONLY per tax year or does that mean that I cannot pay anything else in ever once I max it out at 3,600

If I can make no additional deposits on this account after opening, what is the best ISA that will let me make additional deposits.

Sorry if they are lame questions - I find finance challenging at the best of times. I am a tax payer, if that influences what I can/can't do

Thanks a million

Graeme

jem16

gcolj wrote: »

Hiya. I also thought I'd add my question on here as opposed to opening a whole new topic.

Basically I have some spare cash and want to open an ISA. I can put in the full 3.6k. I've been looking at a Halifax Fixed Rate ISA but have one question.

the T&C are;

Minimum opening balance - £500 - I can pay full 3,600
Maximum balance - up to £3,600 in any one tax year - Can I pay another 3,600 into the same ISA at the start of next tax year?
No withdrawals - I can managae that
No additional deposits - after account opening - Is that ONLY per tax year or does that mean that I cannot pay anything else in ever once I max it out at 3,600

It means you cannot ever pay anything else into it. It's fine if you intend to pay in the maximum and don't want to add to it.

If I can make no additional deposits on this account after opening, what is the best ISA that will let me make additional deposits.

Look at this post for the best non-fixed ISA.

http://forums.moneysavingexpert.com/showpost.html?p=4603369&postcount=1