Cash Isas Transfer discussion

purplestar133

Another question!


I had an ISA through 2006/7. I want to transfer now that the new tax year is here to another ISA which pays more interest, but many won't allow you to transfer in your existing ISA balance. Can I keep my current 2006/7 ISA open and leave it alone and open a new one for 2007/8 with another provider and start again, as it is a new tax year, just paying into the new one?

Thanks for your help everyone!

abunchofletters

A few ISA questions:

1. I have had a Nationwide cash ISA for a few years now – I paid a £750 cheque into the account on the 5th April this year, believing it to be the last day of the tax year and thus the last eligible date for the 2006/2007 ISA allowance. However, my passbook printed my interest earned for that year before the cheque deposit, dated 31st March. Does this mean that £750 counts towards my 2007/2008 allowance rather than the previous year?
2. If I open up a new ISA to get a better interest rate, I want to transfer the money in my existing ISA too, to get the better rate and to keep as one balance. Will this affect the amount I can pay in? I’m sure I heard transfers don’t count towards it.
3. In addition to 2. - If paying in the £750 counted towards 2007/2008’s allowance, how much will I be able to pay into the new ISA account?
4. Should I close the old ISA, or can I pay in £3k into that as well as £3k into the new one? [I won’t necessarily have enough to pay £3k in both, but in future years it would be good to have the opportunity, hence I would keep it open if this is possible]
5. Finally who do you recommend for the new ISA? I see Egg has come out with a new ISA today at 6.05%, ING has 6.55 for six months, then goes down and Barclays has 6.5 for a year.

Thanks for the help, I'm slowly getting myself sorted...

dippenhall

I think it may have already been answered, but do the rules mean that I can for example transfer my last year's Cash ISA into say, Kent Reliance BS - but then add nothing else to it during this tax year. And then open a Barclays Cash Isa and put this year's £3000 allowance into it?

Kazza242

dippenhall wrote: »

I think it may have already been answered, but do the rules mean that I can for example transfer my last year's Cash ISA into say, Kent Reliance BS - but then add nothing else to it during this tax year. And then open a Barclays Cash Isa and put this year's £3000 allowance into it?

Yes, ISA rules do allow this. You can transfer your previous years existing ISAs into an ISA with another provider and open a new mini cash ISA for this tax year with Barclays or any other provider you wish.

Kazza242

purplestar133 wrote: »

I had an ISA through 2006/7. I want to transfer now that the new tax year is here to another ISA which pays more interest, but many won't allow you to transfer in your existing ISA balance.

There are many ISAs that accept transfers in of existing ISAs. For example, variable rate ISAs from Kent Reliance 5.71% and Yorkshire Building Society 5.65% and fixed rate ISAs such as Northern Rock 6.01%. Check out this thread for more mini cash ISA options, here.

purplestar133 wrote: »

Can I keep my current 2006/7 ISA open and leave it alone and open a new one for 2007/8 with another provider and start again, as it is a new tax year, just paying into the new one?

Yes, you can leave your 2006/7 ISA open without contributing further to it and then open a new mini cash ISA for 2007/08. Although, if your 2006/07 ISA is not earning a good rate of interest it is a good idea to look into transferring it to another provider that pays a higher rate of interest. Do let the provider you wish to transfer to handle it all for you.

Kazza242

abunchofletters wrote: »

A few ISA questions:

1. I have had a Nationwide cash ISA for a few years now – I paid a £750 cheque into the account on the 5th April this year, believing it to be the last day of the tax year and thus the last eligible date for the 2006/2007 ISA allowance. However, my passbook printed my interest earned for that year before the cheque deposit, dated 31st March. Does this mean that £750 counts towards my 2007/2008 allowance rather than the previous year?

No, the interest an ISA earns does not count towards the £3,000 mini cash ISA allowance. Therefore the £750 you paid in will count towards your 2006/07 allowance - provided Nationwide definitely received it no later than the 5th April 2007.

abunchofletters wrote:

2. If I open up a new ISA to get a better interest rate, I want to transfer the money in my existing ISA too, to get the better rate and to keep as one balance. Will this affect the amount I can pay in? I’m sure I heard transfers don’t count towards it.

No, it will not. We all receive a £3,000 mini cash ISA allowance each tax year (rising to £3,600 from April 6th 2008). The money from previous years ISAs or the interest accrued do not count towards the £3,000 allowance.

abunchofletters wrote:

3. In addition to 2. - If paying in the £750 counted towards 2007/2008’s allowance, how much will I be able to pay into the new ISA account?

The £750 won't count towards your 2007/08 allowance if Nationwide definitely received your cheque by April 5th 2007. Therefore, you would still have your full £3,000 allowance available for 2007/08.

abunchofletters wrote:

4. Should I close the old ISA, or can I pay in £3k into that as well as £3k into the new one? [I won’t necessarily have enough to pay £3k in both, but in future years it would be good to have the opportunity, hence I would keep it open if this is possible]

Don't close your old ISA or the money within will lose its tax free status. If you wish to open a new mini cash ISA for 2007/08 then you cannot contribute further to your existing ISA.

You could transfer your existing ISA to another provider paying a higher rate of interest and open a new isa for 2007/08. Or you could leave your existing ISA where it is and open a new isa.

abunchofletters wrote:

5. Finally who do you recommend for the new ISA? I see Egg has come out with a new ISA today at 6.05%, ING has 6.55 for six months, then goes down and Barclays has 6.5 for a year.

All three of the ISAs you have mentioned above offer very competitive rates of interest. Choose the one that best suits you.

Miss_Informed_2

On Sunday I posted info (on a different board) that I had just verified that the top paying ING ISA (top paying for first 6 months) doesn't accept transfers in. The poor old ING employee sweating away there at the end of the telephone on Easter Day when I telephoned (don't say anything about MY social life!!!) said that 'they had been looking at this point for a few weeks (?) and would email if the policy changed.'

I discovered this when I looked into the Terms & Conditions and the wording about transfers in had an ambiguously-worded sentence about 'no transfers in unless they made an exceptional case' or something.

Anyway, no use to me - and the six months top rate period is ticking down.

isofa

I'm in a dilemma, I have 2 cash isa with different providers, both paying 5.05, I have the largest balance in HSBC (which is a CAT Standard cash mini isa).

I haven't yet used my 3000 allocation for this new tax year.

I've just reviewed the Yorkshire Building Society eISA at 5.65% which looks good and accepts transfers in from other ISAs.

I assume as the HSBC one is "CAT standard" there should be no penalties for transferring the entire balance out to another ISA. Forms from YBS mention providers can take 30 days to transfer out - so is it worth it?

As the YBS rates aren't tiered, would I be better opening a top rate new cash isa (such as NS/I or Northern Rock) and just leaving the larger balance where it is?

purplestar133

Thanks for all the help so far everyone.

Just wondering, is it more worthwhile for me to transfer what I've saved in my last two years of ISAs to a new provider that accepts previous years cash, and leave it there whilst opening a new ISA for 2007/8 with a top rate for what I'll save this year, that doesn't accept previous year's cash, such as the recently launched Barclays one....or... would it work out better to transfer to a provider that accepts previous year's cash, and put this year's savings in there aswell, because, even though such accounts seem to have a lower interest rate, I will have a higher balance...??

hope this makes sense...!

Actually, I think I'm asking a similar question to isofa!

jem16

purplestar133 wrote: »

Thanks for all the help so far everyone.

Just wondering, is it more worthwhile for me to transfer what I've saved in my last two years of ISAs to a new provider that accepts previous years cash, and leave it there whilst opening a new ISA for 2007/8 with a top rate for what I'll save this year, that doesn't accept previous year's cash, such as the recently launched Barclays one....or... would it work out better to transfer to a provider that accepts previous year's cash, and put this year's savings in there aswell, because, even though such accounts seem to have a lower interest rate, I will have a higher balance...??

hope this makes sense...!

Actually, I think I'm asking a similar question to isofa!

Makes no difference what the balance is - it's still earning less interest. The only time it matters is when you get a higher interest rate for having more in the account like Abbey who offer 5.75% on balances over £9k.