confused about ISA

astral55

Hi ..I opened an ISA with alliance and Leicester last march. I put in lump sum and am currently making monthly payments. I have not saved up to the limit so far. I now want to start paying a bit more so what should I do now-- continue with this ISA or start a new one?

HGLTsuperstar

What's the issue? Just pay in a bit more as you need to, why open another one (which you'd have to wait until Thursday for anyway). You won't be able to pay into more than one per year, and you lose the effect of compound interest

Mikeyorks

astral55 wrote:

I now want to start paying a bit more so what should I do now-- continue with this ISA or start a new one?

The way you phrase that doesn't sound like ' a bit more in the next 48 hrs?' - which is all the time you have left for 05-06.

If you want to continue with an ISA - you'll therefore have to open a new one for 06-07. As it's odds on the Int rate is different - so you can't normally utilise your 06-07 allowance into an 'old' cash ISA and finish with money in one pot - but which is attracting different rates.

grumbler

HGLTsuperstar wrote:

...and you lose the effect of compound interest

I agree with everything you say besides these last few words ...

To the OP: after 5th of April you can either coninue to pay into your old ISA or to open a new one. If the new ISA looks better and accept transfers you can transfer the old one. If you have paid something into the old ISA in the next tax year and see a better deal, you can transfer the old ISA and continue paying into the new one.

HGLTsuperstar

Which would mean then Grumbler, that entire pot in one place so my point about compound interest ;still stands. I meant get the whole lot in the best paying account, if that wasn't clear initally

grumbler

HGLTsuperstar wrote:

Which would mean then Grumbler, that entire pot in one place so my point about compound interest ;still stands. I meant get the whole lot in the best paying account, if that wasn't clear initally

Interest is compounded irrespective of the number of pots you have. Of course, if your different ISAs have different AERs, it is worth consolidating them at one place where interest rate is the best, but this has nothing to do with compounding. If different ISAs have the same AER you don't win anything by consolidating them.