ING Cash ISA question

mangroa

Hi all,
My wife has a 2008/09 cash ISA with ING. In April she got a letter saying that she can no longer deposit money into the ISA. The letter suggests opening a 2009/10 cash ISA.

If she opened the 2009/10 ISA does that mean she would have 2 separate accounts. One with the balance as of April 09. One empty one ready to add more cash?

If its two accounts then does the 2008/09 account still earn tax free interest? Or do we need to transfer this somewhere else?

We are new to ISAs so dont really understand how this all works.
I thought that it is a single account that we can deposit a max of £3600 over any one tax year so the balance rises over time. However this seems like you have to create a new account every year. Is this the case for all cash ISAs? Or does it differ between companies?

Many thanks
Alan

Lokolo

You can if you want deposit a further £3,600 into the ING ISA. Not sure why they said you can't? You usually can.

But if you don't want to then yes, you can open a new ISA for this tax year and deposit £3,600.

You will then have 2 seperate ISAs (different tax years so its fine) both earning tax free interest.

You can leave them as they are, you can transfer them both into the same one if you want.

----

Currently I have2 ISAs:

Halifax Fixed Rate ISA from 08/09: £3600
Birmingham Midshires Fixed Rate ISA from 07/08: £3000

If I wanted I could move them into 1 ISA.

staffie1

Trouble is, the 2008/9 ING ISA is now paying a pathetic rate of interest. ING always do this - start a new ISA year with a competitive rate, then systematically slice the rate periodically until it's practically worthless. Who do you think is paying for all that advertising you see everywhere..?
Go for another provider - one who fixes the whole rate (not just an element of it) for the whole tax year.

mangroa

Thanks for the replies
So does transfering from last years ISA into a new ISA use up this years £3600 allowance?
eg, Can we transfer £1000 from last years ISA into a new one then add another £3600 cash?

staffie1

only with a different provider and one who accepts transfers in.

Lokolo

Not if you do it the ISA way. You can open a brand new fresh ISA with £0 in it. You then fill in a couple of forms with the new provider, they then get the money from ING and put it in the new ISA. You can then deposit a further £3,600 (this years limit).

mangroa

Thanks very much, thats answered all my questions!