Natwest Cash Isa Plus and Cash Isa difference?

focus888

Hi,

i have an existing natwest cash isa and seeing as its a new financial year was going to put some money in and they cashier advised me why didnt i open the cash isa plus instead of using my old one because the interest is higher. i thought that was for new customers only. Im confused. is there any difference in them apart from the interest rate?

when reading on the natwest site it says it will Guaranteed interest – never less than base rate until at least 1st February 2010 - what is the base rate? is this what the bank of england has put as their base rate which is 0.5? sorry im totally clueless with all this terminology.

Im always worried the bank is trying to get me to open those stocks and bond isas which i dont have a clue about so dont want to really get involved in. But this sounds too good to be true, that its exactly the same as my old isa but it has better interest. is this right?

thanks a lot

agsnu

the Cash ISA Plus can only accept new money, not transfers. So you can only put your new £3600 in - you can't put your existing ISA balance (previous years' deposits and interest) in and get a higher rate of interest.

Also you might want to consider transferring your existing funds to an e-ISA, which has substantially better interest.

focus888

If the higher interest rate on the ISA plus doesnt last the full period can i transfer the money back into my old ISA account?

thanks

bunny71

focus888 wrote: »

If the higher interest rate on the ISA plus doesnt last the full period can i transfer the money back into my old ISA account?

thanks

You can only have one active cash ISA in any one tax year, and deposit up to £3,600 during that time.

If you've paid in £3,600 to a Cash ISA but then make a withdrawal, you cannot pay the money back in to any ISA until the following tax year (6 Apr).

You seem to be in the same situation I was in with HSBC. Their cash isa is giving 0.2% compared to their cash e-isa of 1.74%. The only difference (other than the rate) is that the cash e-isa takes only new deposits, whereas the cash isa also accepts transfers in (if you have a previous year's ISA held elsewhere). Basically, they're trying to attract new business, so offering higher rates to new customers/savings. Existing customers can benefit too by putting up to £3,600 in one, but it means using up your tax free allowance again as you're re-investing the same money.

Absolutely go with the higher interest rate cash ISA (as I did). It's a gain for you. A stocks and shares ISA is a totally separate type of arrangement and will have nothing to do with this.

Yes, the base rate is the Bank of England base rate, currently 0.5%.

aspiration_2

Is it possible to have two seperate cash ISAs for a year as long as the total of £3600 is not exceeded ?

Cheers All