Query on ISA

macca64

OK Guys & Gals, time to pick your brains.

1. My father has a Cash ISA with A&L, but it is an old one paying something like 3.65%. However most of the balance has been withdrawn, and the current balance is less than £100.

Next year he will be wanting to put £2000+ in his Cash ISA, so is he allowed to close the A&L one now and then opening a new one next year with a new provider (either Halifax, B&B, or Yorkshire)? This will mean that he doesn't need to transfer his ISA as there is only £100 in there.

Is this possible?

2. I have an ISA with Smile, and the rate has been dropped to 4.5%, I'm looking to transfer this to a new provider. However Yorkshire don't accept transfers in, Halifax have bad customer services (or so I have heard), and B&B have a limit of £3,000 (I think) on the amount you can transfer in.

So it looks like A&L or Halifax, however on A&L I'm looking at extra interest of 0.7% and with Halifax 0.5%, however what I don't want to happen is transfer my ISA then have these drop there rates without the BOE dropping rates, is this likely?? Also how long does it take to transfer an ISA?

Can I open a Yorkshire cash ISA for next tax year 06-07, and still keep my Smile ISA with previous years contributions in?

Thanks in advance for your help.

grumbler

macca64 wrote:

1. ...is he allowed to close the A&L one now and then opening a new one next year with a new provider (either Halifax, B&B, or Yorkshire)? This will mean that he doesn't need to transfer his ISA as there is only £100 in there. ...Is this possible?

I don't see any problems in doing this.

2. ...Halifax have bad customer services (or so I have heard),

ISA is not a current account. I don't see any point in sacrificing interest rate in order to get better service that you actually don't need

So it looks like A&L or Halifax, however on A&L I'm looking at extra interest of 0.7% and with Halifax 0.5%, however what I don't want to happen is transfer my ISA then have these drop there rates without the BOE dropping rates, is this likely??

If you want to be sure look for ISAs with fixed rates. Now these rates will be lower than variable ones. In fact, it is very easy to transfer the ISA if interest rate drops.

Also how long does it take to transfer an ISA?

It can take few weeks, but loss of interest is only for few days.

Can I open a Yorkshire cash ISA for next tax year 06-07, and still keep my Smile ISA with previous years contributions in?

Yes, althouth I think it is better to transfer old ISA(s).

kazd

Hope you don't mind if I add my query. I just want confirmation that I can proceed as follows.

Have a Intelligent Finance Isa that has been open for a couple of years. Currently I only have this years allowance in there. I want to open a new Isa with A&L (actually already applied for it) and transfer my balance in before this tax year ends and then add more money from 6th April.

Please can you confirm that this is ok.

Thanks

grumbler

kazd wrote:

...Please can you confirm that this is ok.

Absolutely OK, IMO. Information and ISA Transfer Authority Form are here Transferring existing ISA funds (in case you have not requested transfer on application).

regularsaver1

Halifax have increased their fixed rate isa rates today - not sure exactly what they are, but worth checking

Money_Watch

It's always worth remembering that if you have an existing ISA, and make regular contributions to it via direct debit, make sure that a direct debit doesn't go out after 6th April if you wish to start a new ISA with a different provider.

Often, the first contribution in the tax year will open a new ISA account (many ISA providers just assume you want to carry on investing, unless you tell them otherwise), so you can get stuck with the same provider for another year.

Rob

regularsaver1

Earlier i said that Halifax increased their fixed rates today - i have just been on the website

and http://www.halifax.co.uk/savings/fixedISA.shtml - all terms 5%. So if anyone is worried about the direct isa being variable there is this option

macca64

5% fixed for one year sounds like a good option, however A&L is 5.2% but variable.

Anyone know what the forecast is for interest rates this year, I know last time they kept them on hold, and just wondering as one cut would make the Halifax one a winner, but an increase would make the A&L one much better.

macca64

sending this one to the top again, see last post anyone any views?

I doubt that interest rates will rise this year, but just wondering if people think they will be reduced.