Confused - Please help.

pickles_pink

My apologies if this is a silly question - Here goes,

I have an ISA with HSBC, it pays:-
4.17% on 0-9k
4.41% on 9-15k
4.7% on15k +
I can pay in up to £3,600 PA

Now, I'm thinking of opening Kaupthing Edge* at 6.55% AER

(6.55% from £100, online access with strongest rate guarantee
it guarantees to be at least 0.30% higher than the Bank of England base rate until 1 February 2012, meaning it’ll be a high, if not always top, payer until then. The account is online only and you need £100 to open it.)

So my question is I know you can only have 1 ISA - is the Kaupthing Edge* at 6.55% AER an ISA? is there a maximum amount I can pay in?

I've had a look on the web site and I don't think it is, but I'm not sure.

ETA: I don't think it's an ISA becase it's not tax free.

Please could someone clarify the below - for instance if I invested save £10,000 would it mean that i would get - £10,000 x 6.36% £10,636 - 20% tax on £636 = £10,508.80

(INFO - Kaupthing Edge high interest savings account offers the flexibility of instant internet access and a highly competitive interest rate of 6.55% AER* (6.36% gross). The interest rates will be at least 0.30% (gross) higher than the Bank of England Official Rate until 1st February 2012. )
*AER stands for annual equivalent rate and illustrates the interest rate if it was paid and compounded once each year.
‡Gross is the annualised rate before deduction of tax at basic rate (currently 20%).

I'm not very good at this - sorry.

dwsjarcmcd

From reading the site, it doesn't look like they have an ISA product, just a normal high interest account and a fixed term accounts - both very competitive as it happens, but they are taxable,

The rates you are getting on your ISA are poor so if you are looking for a better rate, then you need an ISA transfer, which effectively takes all your tax free savings from HSBC and transfers it to your chosen provider.

Steve_xx

Kaupthing don't operate an ISA. So if you moved your money from your current ISA to Kaupthing it would lose its tax free status.

You should csnider the Post Office ISA which is paying 6.25%. You can transfer your existing ISA into that one. But you must transfer it in the prescribed manner, ie you can't take the money out of the existing ISA and then put it into a new one without going through the proper transfer protocol.

You could if you wanted to, open a new ISA with the Post Office for this years £3600 allowance, and leave the exisiting ISA with HSBC.

http://www.postoffice.co.uk/portal/po/jump1?catId=19300232&mediaId=82300737

pickles_pink

Thanks Guys,

I didn't realise that you can "Tart" with ISA's and switch to a better rate!

Now I do and have applied for the A&L 6% - Also moving my current account over too - £100 for free & much better rates.

Thanks for your help.

Jono

I'm sure you know, but just to clarify, you need to "transfer" your ISA, not close it (and take the cash), as this would loose the tax free status of your existing ISA money.

collingwood21

Transferring ISAa is actually very easy - did it myself this year. You need to find a new provider, who will be able to provide you with a "transfer in" form and tell you what information they need from you. You then return your form and the new ISA provider should do the rest for you...and you will soon be earning a better rate of interest!