Cash Isas Transfer discussion

Lugh_Chronain

greenmummy35, everyone has a right to transfer their existing mini-cash ISA to another provider. If you're unsure I’d recommend reading the Cash ISA Transfers article.

laurel01, deposits made with Icesave are protected under the Icelandic Deposit Guarantees and Investor-Compensation Scheme and the UK Financial Services Compensation Scheme. The total financial protection given to you under both schemes is the same as you would receive if your deposit was only protected by the UK scheme. The maximum claim amount of £35,000 (as at October 2007) is the same as every other bank in the UK. Have a look at Icesave’s Key Facts for more info.

I’ve been thinking about investing in a fixed rate ISA because at the moment rates seem to be going down so was considering the risk. However that all depends on how much they go down. If they stay as they are then I guess it’s probably better playing safe and sticking with a regular cash ISA. That’s my personal view anyway. It is up to you how you want to invest and what risks if any you are prepared to take and if you don’t think you will touch your funds.

Do bear in mind that £150 is less then half of what you’ll be allowed in the next tax year 12x£150=£1800. The annual ISA investment allowance will be raised to £7,200. Up to £3,600 of that allowance can be saved in cash with one provider. The remainder of the £7,200 can be invested in stocks and shares with either the same or a different provider. Read ISA rules are changing from 6 April 2008 from HMRC’s website.

greenmummy35

Thanks Lugh.
I understand about being able to transfer mini to mini isa. Does the same apply then if I want to transfer money from the Cash element of maxi isa to a mini isa. Thants what I'm trying to get a handle on.
I will re read the article though, it might make better sense after a second read. Cheers

SirSaveALot_2

greenmummy35 wrote: »

Thanks Lugh.
I understand about being able to transfer mini to mini isa. Does the same apply then if I want to transfer money from the Cash element of maxi isa to a mini isa. Thants what I'm trying to get a handle on.
I will re read the article though, it might make better sense after a second read. Cheers

Hi

I'm not quite sure about the rules currently for this. "[FONT=Arial, Helvetica, sans-serif]Transfers must be like for like[/FONT][FONT=Arial, Helvetica, sans-serif]. In other words a mini-cash ISA must stay a mini-cash ISA" from http://www.moneysavingexpert.com/savings/cash-isa-transfers suggests no.

But I do know that in April this year the ISA rules are changing, including the removal of the mini/maxi distinction. At this point, "[/FONT]Mini cash ISAs, TESSA-only ISAs (TOISAs) and the cash component of a maxi ISA will automatically become cash ISAs." from the surprisingly easy to understand http://www.hmrc.gov.uk/isa/rule-change-april08.htm

So if you wait a few months, the answer is yes you can.

Hope this helps
SirSaveALot

PS. Always follow the correct process for ISA transfers. Don't withdraw the money and then deposit it to the new account, open the new account and request the new account provider to carry out a transfer. Otherwise, you lose the tax-free status.

SirSaveALot_2

laurel01 wrote: »

Hi,
I currently have about £6,500 in my Halifax ISA Saver Direct which at the moment pays 5.50 % interest. I can afford to pay in about £150 per month and was wondering whether it is worth transferring the total funds to the Icesave ISA which has a rate of 6.1 % or should I transfer it to a fixed rate ISA which is 6.3 % with Halifax, or should I leave it where it is? The reason I am a bit hesitant is because I have never heard of Icesave, so I don't know how reliable they are, whereas Halifax claim to be the no.1 ISA provider in the UK.
I would appreciate any advice.

Hi

Should you leave it where it is? No - unless you don't mind wasting money. The difference between £6500 at 5.5% and 6.1% is around £40 for the first year - not that much perhaps, but with your further contributions and compound interest it would be much more than that over a few years.

Fixed or variable? Depends if you think interest rates are likely to go up or down, I suppose. Icesave have a good rate guarantee, and you can always transfer again so I personally would (in fact, probably will) go with them.

Also, are the terms of the Halifax account OK? It does not appear to allow withdrawals within the term (1 year minimum). It also doesn't appear to allow further deposits, though you could open a different ISA for new deposits (next tax year).

Worried about Icesave? http://www.icesave.co.uk/about-icesave.html may help you decide. I have one of their easy access savings accounts and opening and running it have both been very smooth.

Standard warning: When transferring ISAs always be sure to follow the rules otherwise you lose the tax-free status. Don't withdraw the money and open a new account with it. Always open the new account and ask the new account provider to carry out a transfer.

Regards
SirSaveALot

laurel01

SirSaveALot wrote: »

Hi

Should you leave it where it is? No - unless you don't mind wasting money. The difference between £6500 at 5.5% and 6.1% is around £40 for the first year - not that much perhaps, but with your further contributions and compound interest it would be much more than that over a few years.

Fixed or variable? Depends if you think interest rates are likely to go up or down, I suppose. Icesave have a good rate guarantee, and you can always transfer again so I personally would (in fact, probably will) go with them.

Also, are the terms of the Halifax account OK? It does not appear to allow withdrawals within the term (1 year minimum). It also doesn't appear to allow further deposits, though you could open a different ISA for new deposits (next tax year).

Worried about Icesave? http://www.icesave.co.uk/about-icesave.html may help you decide. I have one of their easy access savings accounts and opening and running it have both been very smooth.

Standard warning: When transferring ISAs always be sure to follow the rules otherwise you lose the tax-free status. Don't withdraw the money and open a new account with it. Always open the new account and ask the new account provider to carry out a transfer.

Regards
SirSaveALot

Thanks for the advice SirSaveALot. I think I will transfer my Halifax Isa funds to Icesave to get a better interest rate because I think it will be worth it in the long run.

isasmurf

greenmummy35 wrote: »

I understand about being able to transfer mini to mini isa. Does the same apply then if I want to transfer money from the Cash element of maxi isa to a mini isa. Thants what I'm trying to get a handle on.

This depends on what year's subscriptions you want to transfer. Any subscriptions from the current tax year can only be transferred into the cash element of a Maxi ISA, and as you can only subscribe to 1 Maxi per year any current year subscriptions in the Stocks & Shares element must be transferred too.

For previous years it is different though. The Mini and Maxi labels only apply in the year the subscriptions were made. This means any subscriptions in the cash element made in previous years can be transferred to the cash element of any ISA, i.e. you can transfer previous years subscriptions from a Maxi to a Mini ISA, as long as cash stays as cash.

This is explained in the ISA FAQ

Mikeyorks

greenmummy35 wrote: »

Does the same apply then if I want to transfer money from the Cash element of maxi isa to a mini isa.

No .. you can only do that if you transfer the entire Maxi ISA. But the definition of whether the cash element is still Maxi .. depends on whether it is the current year subscription or not. This quote from HMRC isn't the best .. but I've made bold the bits you need, to make a decision :

However, the designation of an ISA as a maxi or mini is only important for transfer of current year subscriptions. So, for example, current year subscriptions to the stocks and shares component of a maxi ISA can only be transferred to the stocks and shares component of another maxi ISA. However, previous years’ subscriptions the stocks and shares component of a maxi ISA can be transferred to a stocks and shares mini ISA or the stocks and shares component of another maxi ISA. Similarly, current year subscriptions to a cash mini ISA can only be transferred to another cash mini ISA. However, previous years’ subscriptions a cash mini ISA can be transferred to the cash component of a maxi ISA or another cash mini ISA

In essence ... if you've contributed (other than the interest you mention) to the cash element of the ISA this year .. you can't do what you require until after 5th April (unless you transfer the entity of the Maxi). If you haven't contributed to the cash element .. then it's regarded as a mini-ISA and you can transfer it now.

EDIT - Whoops - saw your note yesterday and hadn't realised isasmurf had replied ... extremely accurately, as usual.

greenmummy35

Thanks everyone for your help and suggestions. I'm now going to re read everything again, to make sure I understand, then come April I'll be looking for another ISA!!!
Cheers
Greenmummy35

Lugh_Chronain

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soulandy

I have just got my statement from my Pearl Mini ISA Bonus Account :mad: and finally I can get me hands on it.:T I'd like to transfer it but as I have already put this years £3000 away I'll have to wait till April. The total sum might just exceed the new £3600 so would I be best getting the cash or could I transfer it to another if its over £3600? We have a couple with the cheshire (fixed rate) but the barclays looks like a decent rate. I don't need to use this for a few years but I would like to add to it.
Am I allowed to put money in to two ISA's, say £1500 in each in any one tax year, or can you only put in to one in any one tax year?
Cheers