Cash ISA Discussion/Question

System

IF a person had £4k to invest in the new tax year - with the ISA limit (cash) being 3K - what are peoples best suggestion for the remaining 1k?

salmac_2

Darryl - M&S Money are paying 4.5 per cent until APRIL 2005 and although it is one per cent below IF it is GUARANTEED to be 0.5 per cent above base rate until April 2005 - I have now transferred to them and do you blame me?

salmac_2

Maximus - I would put your spare £1000 with ingdirect.co.uk - present interest is 4.5 per cent and they are so on the ball - unlike IF!

salmac_2

Darryl - sorry M&S rate is actually 0.1 per cent beliow IF -Not One per cent!


Salmac

PHOEBE_2

:)Hello Darryl,

Hoping you can help - you have helped in the past. i have mini cash ISA £8700 with northern rock 3.75%-no noticfication charge for withdraw or transferrring. i also have £1300 with the bank of scotland.

I feel it would be better to trtansfer at least the northern rock to a better rate and put another £3000 into the new account this year 1. can i do this and 2.if so how do i go about doing so?

3.Also Can i then transfer the Bank of scotland too?

and 4. lastly which would you recomment M&S i presume?


thanks if you can help it is a long time since i contacted you Regards Pat

Darryl

Hi Pat

Firstly, thanks for asking for my advice/views - makes me feel wanted... :-)

Anyways, here goes:

I presume that both the £8700 Northern Rock ISA and the £1300 BoS ISA are sums that you have not deposited in this current tax year (i.e. you haven't added any cash to these between 6th April 2003 and now).

If this is correct, you can transfer both ISAs to any one you prefer, and get a better rate. Transfer is the keyword here. Don't withdraw the cash. You will lose your ISA allowances.

To transfer your ISAs you simply have to complete a transfer form (usually part of the application for the new ISA form). For example, M&S have details about how to transfer on their website:

http://www6.marksandspencer.com/pages/default.asp?pageid=faq&Product=IC

As for which ISA to choose, I'd say the choice is between IF.com and M&S.

Currently, IF pays 0.1% more than M&S. But, M&S offers a guarantee that is better than IF.com's. Excuse the IFs and buts ;-)

It's up to you. Do you want the best rate now, with a reasonable guarantee that it will stay high? Yes? Then IF is the option for you.

Else, do you want a good rate with the best guarantee that it will stay high? Yes? Then M&S is the option for you.

Hope this helps.

Darryl.

Galstonian

IF get a bit of a pasting for poor customer service in some other postings, nay be worth reading up before transferring. I don't have any experience of either company's ISAs.

jaffa

I am not impressed with M&S money customer service.
I am in process of transferring previous cash ISA's to them. Have phoned many times and waited in a queue for 20 minutes or more. Have left several messages for a "call back" and a week later I'm still waiting!! Guess they are busy.

PHOEBE_2

Hi again Darryl
just to thank you once again. I think i will gofor the m&s option as feel northern Rock is not the best deal, and
question 1.after april i will be able to put in a further £3000.00 as long as i transfer before then ??

or question 2. does the transfer not count if you want to put in your year's allowwanc of £3000.00

It is good to get in touch and i do mean it when i say you have been helpful as it is always beter to have someone to discuss things with and other friends are not always available or even appropriate.

Thanks and Cheers Pat

Darryl

Hi again Pat

Answer to Q.1.: you can transfer ISAs at any time. The amounts you paid into the ISAs in each tax year stay linked to that tax year in your new ISA, as long as you've completed the ISA transfer form. Obviously, the sooner you transfer the sooner you'll be getting the better rate of interest.

Answer to Q.2.: well, I'm not sure exactly what you mean, but here's what I think you're asking: 'Can I transfer my current year ISA into a new ISA and then add an extra £3000 to the new ISA this year?

If this is what you're asking then the answer depend on the amounts of cash involved.

You can only add £3000 in total cash to ISAs in any one tax year. i.e. you can add £1700 to Northern Rock and £1300 to BoS between April 2003 and April 2004. If you transfer both to M&S then the new ISA will have your total £3000 allowance for the tax year 2003/04. So, you won't be able to add any more until 6th April 2004.

If you haven't added your total £3000 allowance to ISAs already this year, then transfer what you have got in your Northern Rock and BoS ISAs, and add the difference to the new M&S ISA.

In both cases, all previous years ISAs (amounts added I guess to the Northern Rock account in 2001/02 and 2002/03) can be transferred, but not added to.

Hope this is clear.

Darryl. :-)