Nearly that time of the year

mattih5

Hi,

Just a few questions regarding ISA'S.

I have a Bradford & Bingley ISA which I opened when I was a student about 3 to 4 years ago and have added and withdrawn money - mainly withdraw with being a student. However this is besides the point.

I'm a bit more mature now being a graduate.

I would like to open the Alliance & Leicester Mini ISA with a rate of 5.2% as I see this as being the best. I would then like to dump a full 3k into this. This is fine I understand all this but what I am getting confused with is the previous ISA I have.

Can I still earn interest on the Alliance & Leicester ISA as well as the B&B one?

Is it worth having two open?

Will I earn the full interest on the A&L one if I only open it a month before the tax year is open? If not is it worth topping up my B&B one? If I top up the B&B one will I only earn interest for having that money in from a month before the tax year?

A a tad confusded with all the interest side of things.

grumbler

mattih5 wrote:

Can I still earn interest on the Alliance & Leicester ISA as well as the B&B one?

Yes. You can either keep the old ISA(s) or transfer it to the new proveder

Is it worth having two open?

IMHO, no. However I was too lazy to consolidate all my ISAs and have done this only recently.

Will I earn the full interest on the A&L one if I only open it a month before the tax year is open?

You will earn full interest for the time you have money on the account - one month in this case.

If not is it worth topping up my B&B one?

No.

mattih5

Hi, thanks for your reply. Why is it not worth keeping two open?

sly_dog_jonah

mattih5 wrote:

Hi, thanks for your reply. Why is it not worth keeping two open?

Because older accounts inevitably have lower interest rates than those which can be opened now.

grumbler

mattih5 wrote:

Hi, thanks for your reply. Why is it not worth keeping two open?

Just because, I guess, one of them pays more interest. Hence, it is worth transferring the other one with lower interest.

Patr100

As i understand it, You can't "keep two open" . You are not allowed to have more than one mini ISA per person per tax year. If you find one with a a better rate you must transfer the old balance to the new by the correct procedure or you lose ISA/tax free status on the amount accrued so far.

grumbler

Patr100 wrote:

As i understand it, You can't "keep two open" ..

Your understanding is wrong!

You are not allowed to have more than one mini ISA per person per tax year.

Your are allowed

If you find one with a a better rate you must transfer the old balance to the new by the correct procedure or you lose ISA/tax free status on the amount accrued so far

No, you must not. The only restriction is that you cannot open and fund more than one ISA during a financial year.

codetown

Yes,
consolidating is an ordering exercise useful to get all the money in the pot that pays most.

But it is NOT required.

You can keep as many ISA as you wish (even in the case you opened one per year at 3k and each year with a different provider). From the human point of view probably it is easier to keep an eye on one account rather than 2/3.
Also if in the future another provider will come up with a better ISA, it will then for you be easier move one rather than 2 different accounts.

meanmachine_2

To the OP, open up a new ISA account at the start of the new tax year (or this year if you haven't used up your 3K quota), and transfer old funds into this one.

That's what I'll be doing. I have a couple of old A&L ones which don't pay much interest.

So be aware - keep transferring each year (that's transfer, not withdraw and close), as banks, especially the A&L will trim rates on old accounts.

Currently their ISA rate is at around 3.4%, while their direct ISA is 5.2% (inc bonus). Crafty sods.

Also, make sure you put something into your ISa each year, in order to keep it active.

Deemy

Also remember that if you consolidate yuo will lose out on any future windfalls if or when the BS's convert.

MiserlyMartin

Unless you leave the ISA open with £100 or more in it. This is fine as long as the provider allows 'partial transfers'.

A question, so could I for arguements sake, open up as many ISAs in a tax year as I like, as long as I only subscribe (using that years allowance) to one of them?