Halifax ISA

Aviator|Chris

Hi all,

I have a Direct Reward ISA with my bank (Halifax) at the moment that I opened in February this year, earning 3% interest fixed for 1 year.
(http://www.halifax.co.uk/savings/isa-direct-reward.asp)

I have filled the ISA with £3,000 so far and intend to fill it to the £3,600 maximum before the end of the tax year.

When April 5th 2009 comes and goes, does this entitle me to add an additional £3,600 to my ISA, and interest being paid at the anniversary (Feb 2010)?

Then when the 1-year period is up and the account matures, I can then move my cash to another ISA?

Just trying to understand more about my account.

Thanks.

DON79

Yes you can top it up again when the new tax year starts, the rate is not classed as a fixed rate, it is a guaranteed rate for one year which means you can add more into the account whereas if it was a fixed rate, you could not add more funds.

Then when the year of the guaranteed rate is up, you can then do an ISA transfer either within Halifax or change to another bank.

You are also allowed upto four withdrawals without it affecting the interest rate of the account.

Donna

Aviator|Chris

Thanks Donna!

Good to hear some re-assurance and useful information in these times.

Cheers.

:j

Aviator|Chris

I do have another question (sorry!!).

The site says that Interest is paid annually on April 5th, but my 1-Year ISA ends on February 2010.

So what do I do, leave my ISA account alone when it finishes until April 5th 2010 to pickup interest or is interest delivered at the end of the ISA period and thats it?

Just a bit lost about aligning the Tax Year to my ISA year. Don't want to make any mistakes with my finances so I'm all ears for some educating.

Thanks.

Baldur

Aviator|Chris wrote: »

The site says that Interest is paid annually on April 5th, but my 1-Year ISA ends on February 2010.

So what do I do, leave my ISA account alone when it finishes until April 5th 2010 to pickup interest or is interest delivered at the end of the ISA period and thats it?

That's up to you - the likelihood is that the rate offered when it matures will be very poor, so why leave it there? If you transfer it to a new account/provider that offers a better rate on maturity, any interest earned until the date of transfer will be added to the transferred balance.

The annual payment date is only relevant if you intend just to leave the account where it is for an 'easy life' (if a less profitable one).

Aviator|Chris

Hi Baldur!

Thanks for the extra information!!

So when the account matures at the anniversary of opening, is the Interest paid into my current account or added to the ISA? How do I see how much Interest has been added after the first year?

Sorry if my questions are all very amateur but I'm new to the world of ISA's.

Thanks.

Chris.

DON79

The interest will be added onto your ISA balance - you should be able to check the balance online on the anniversary of the account opening and the interest credit will be on there.

Donna

456789

It is paid into the ISA - around that date it should show on your online banking

BTW the 4 withdrawals limit includes transfers

edit: DON79 was faster

Aviator|Chris

Cheers all!

Thanks for the explanations, what was very much a pea-soup is now very clear!

Thanks.
:beer:

rb10

DON79 wrote: »

The interest will be added onto your ISA balance - you should be able to check the balance online on the anniversary of the account opening and the interest credit will be on there.

Donna

No, this is not correct.

The interest is paid annually on 5th April, regardless of when the account was opened.

So, say you opened the account on Feb 1st 2009. Then, on April 5th 2009, you will get interest paid at the Reward rate for just over two months (i.e. 3% of your balance divided by 6, plus a bit).

Then, on 1st Feb 2010, you may want to transfer the ISA elsewhere, as the rate may drop then. You won't at this stage see any interest having being credited to your account online, but you have two options:

i) Transfer elsewhere, asking the new provider to close your Halifax account. In this case, all interest earnt (but not paid) between 5th April '09 and the date of transfer will be transferred to the new provider with the whole balance.
OR
ii) Leave it in the account (which will by then be an ISA Saver Direct), and interest will be credited on 5th April 2010. The rate used to calculate this will be 3% for 6th April 2009 to 1st Feb 2010, and then the ISA Saver Direct variable rate from then until 5th April.

Aviator|Chris

This is what I was thinking.

So on the anniversary of the existing Halifax ISA, I could transfer the funds w/ Interest in-tact (with appropriate methods) to a new ISA with a better interest rate, then in April 2010, my new ISA will reflect the interest from the previous Halifax ISA?