Different bank accounts confusion

Lighters

I have read the faq and im still completely confused as i have multiple questions and im being overloaded with information so i appreciate any input anyone has, thnx

I have 3 accounts and want to make the most money i can out of saving
Easy access savings account
Pre student account
Cash ISA HSB i can upgrade to a e-isa for 6.2%?

Im 18 a FT student studying Digital Applications Development for a foundation degree
1. What isa should i switch to for the best % currently i have 4.x
2. What is the best student account or current account where i can deposit and transfer money without being penalised
3. I have £3000-£1000 = £2000, can i then deposit anymore cash inside my isa or do i need to wait until april again?
4. Gross and AER - on an isa it says 6.25% aer and yet 6.1% gross yet i thought isa were tax free?

Baldur

1. Read this article & this post for the best Cash ISA rates.

2. ?

3. Any money which you have removed from a Cash ISA can't be replaced - if you paid £3000 into your ISA after April 6th this year and have since withdrawn £1000, you can only pay £600 into your Cash ISA - the annual limit is £3600.00 from this year.

4. See the item on AER here.

Lighters

ah now i understand about that +600, i was thinking how can you possibly put 600 into an ccount when it says if you remove money you cant put it back in but then it went from 3k to 3.6 so you can add 600always correct

Ie, i remove 500, i can then add 500 later this year and then at a later date at 100 more

Baldur

Lighters wrote: »

ah now i understand about that +600, i was thinking how can you possibly put 600 into an ccount when it says if you remove money you cant put it back in but then it went from 3k to 3.6 so you can add 600always correct

Ie, i remove 500, i can then add 500 later this year and then at a later date at 100 more

You can pay in only £3600 per tax year - however much you withdraw is irrelevant. In your case, you have already paid in £3000, so have a further £600 left from your annual allowance.

Withdrawing from a tax-free ISA is not a good idea, unless you are desperate, as any money in the ISA retains its tax-free status ad infinitum (or, at least as long as ISAs last)...;

Lighters

does that also mean when my next tax year starts i could take out 1000 for whatever reason and still put 1000in because i hadnt put any money in that year? what happens with the interest its accured such as excess 3600?

Can you switch isa mid year also? ie can i change my isa to a better provider?

Baldur

Lighters wrote: »

does that also mean when my next tax year starts i could take out 1000 for whatever reason and still put 1000in because i hadnt put any money in that year? what happens with the interest its accured such as excess 3600?

Forget what you take out - you can pay in £3600 in each tax year. Accrued interest is added to the sum in the ISA, e.g., I have in excess of 40,000 in Cash ISA savings (both capital & accumulated interest) since the start of ISAs.

Can you switch isa mid year also? ie can i change my isa to a better provider?

Yes - choose a new provider and ask them to transfer your account.

slopemaster

Lighters wrote: »

I2. What is the best student account or current account where i can deposit and transfer money without being penalised

That depends of course on what you mean by best
But to offer my experience, I have smile student a/c with 1000 pounds interest-free overdraft in first yr, soon to go up to 1400 I think.
They are very helpful and efficient, UNLIKE my previous bank (RBS) who I would not recommend to anyone.
But whoever you choose, check their definition of student, as some may not accept foundation degrees.
(In my case, some accepted postgrad students and others not.)

Lighters

got it baldur, thnx alot

Lighters

ok looking it seems HSBC e-isa is the best way to go as i have a current account with them.
The e-isa says no transfers in however, online it asks me what account i want to transfer money and if i want to make a lump sum
Would it let me transfer the full £3k for my cash isa into a e-isa when it says no transfers in? ideally i want to put 3.6k in

Lighters

can anyone answer this? ^^^ or will only the bank be able to?

opinions4u

Lighters wrote: »

ok looking it seems HSBC e-isa is the best way to go as i have a current account with them.
The e-isa says no transfers in however, online it asks me what account i want to transfer money and if i want to make a lump sum
Would it let me transfer the full £3k for my cash isa into a e-isa when it says no transfers in? ideally i want to put 3.6k in

I have read this article several times, and don't feel that you have made yourself totally clear as to what your circumstances are with regards to your ISA arrangements.

This is another example of the legislation around ISA still being confusing to people.

I hope, however, that the points below help.

1) If you have not funded any cash ISA with any bank this tax year (since 6th April) you can pay in up to £3,600 to one cash ISA. In these circumstances moving the money from a current account or non-ISA savings account in to a new ISA is fine.
2) If you have funded a cash ISA since 6th April, this is the only cash ISA you can fund this tax year. The total you can pay in is £3,600 in this tax year.
3) Once you have deposited £3,600 in to any cash ISA this tax year, you cannot make further deposits to it.
4) If you are unhappy with the interest rate on an existing cash ISA you should not simply close it and open a new cash ISA elsewhere. You should either (a) ask your existing provider to offer you a better rate or (b) find a new provider who accepts ISA transfers in and ask them to organise the transfer for you.
5) In an ideal world you will only ever withdraw from a cash ISA paying a competitive rate as a last resort. Always look to use other savings / current account funds first as the longer term benefits of holding tax free savings as you become a taxpayer are significant. That said, I do understand that student living does not usually provide the opportunity to build up a tidy nest egg!
6) Assuming you do not pay income tax, remember to advise your bank(s) that all accounts you have should receive interest gross. Remember to amend this if you do start paying income tax (e.g. part-time work that earns you over £6,035 a year).

Always review your interest rates annually - ideally more often - on all your accounts. Banks make their money by hooking you in with a quality rate and gradually managing that rate downwards. The inertia effect of customers who cannot be bothered nets them £billions each year.

Use websites like Moneyfacts or Moneysupermrket to search out the best deals and be prepared to chase the best rate. Forever!