small sum to start saving, whats best out there?

a7man

Barclays have a good ISA but you will need to transfer the balance after 1 year due to the 1% bonus being removed. They do not accept transfers in so you need to make sure your other ISA's plus any extra money you are going to put in wont be over £3600, otherwise an ISA that allows transfers will be a better option.

I would recommend completely closing your other ISA accts as they have bad rates, and combine them all into 1 Barclays ISA. If it is a plussaver account at 4.5% that is even worse as you will be taxed 20% on interest, so close it and move all the money to an ISA.

runciblespoon

a7man wrote: »

I would recommend completely closing your other ISA accts as they have bad rates, and combine them all into 1 Barclays ISA. If it is a plussaver account at 4.5% that is even worse as you will be taxed 20% on interest, so close it and move all the money to an ISA.

Horses for courses, but I wouldn't close the old ISAs for two reasons.

1) is that the OP may have more than £3600 in the old ISAs, so won't be able to pay it all into this new ISA this year
2) The OP may have some more cash to pay in before April (end of tax year). Even if you aren't expecting to it would be foolish to waste your allowance, just in case you had some spare cash further down the line.

Transferring ISAs is quite easy. You just need to dig out the old account number and put that on the application form to the new provider. OK there's a chance they might screw up the transfer (see the ISA board for the trouble some people have had) which isn't your fault, but in paperwork terms it's quite simple.

Do a little calculation. The max you can pay in this year is £3600. The top-paying instant access cash ISA for new money is 6.25% (Barclays Tax Haven). The top rate for transfers with instant access is 6.1% (Icesave). Over a year the most it'll cost you is £5.40 in interest to go with Icesave compare with what you would have earnt at Barclays. Meanwhile, by having the cash ISA instead of a similar savings account you'll save £43.92 in tax. I'd say it's worth paying a £5 interest penalty in case you have more cash you can put in to save you £43.

talana

Horses for courses, but I wouldn't close the old ISAs for two reasons.

1) is that the OP may have more than £3600 in the old ISAs, so won't be able to pay it all into this new ISA this year
2) The OP may have some more cash to pay in before April (end of tax year). Even if you aren't expecting to it would be foolish to waste your allowance, just in case you had some spare cash further down the line.

But point 1) is an ISA transfer of old funds so the OP could move as much as he wished. £3600 or £20000 it doesn't matter. It doesn't affect your £3600 allowance for this tax year (point 2).

a7man

You cant transfer it to Barclays hence my point - as long as the money transferred plus any other contributions you will make this year dont go beyond 3600 take out a Barclays ISA, otherwise you will need a provider that accepts transfers in.