Isa Needa Helpa Pleeese.

larmy16

First of all let me say.:o:o:o:o:o:o:o:o:o as I am so confused about ISA's.

I have an old Isa with A&L (now Santander) from back in the days when you could only save £3,000 per year. For health reasons I needed to draw out £2,000 which I did today leaving me about £1,700 as a balance.

I wanted advice on what I should do with the balance as I was told it was only getting miniscule interest and the advisor was trying to get me to change my current account (I bank with Barclays) to their 6% for a year current account. Now I really really did not want to change my current account as I have a flair for being jinxed whenever I try to change anything and besides my current account is really money in and out, I don't save anything in it.

He said that was the best option. He was saying a lot and I was getting confused a bit like when car mechanics tell you what is wrong with your car.

I asked if I could draw the money out and start a new ISA and I think he said I could put it in a fixed one but could not draw out or add to it. Is that so?

Am I able to transfer this balance to anywhere else and get some interest on it?

Or can I draw the money out and put it into a savings account? What's to do?

Can anyone advise this complete idiot when it comes to ISA's ?:o Please.

KingL

As you have been able to withdraw funds from it, you can also withdraw the rest if you want to.

You will also be able to transfer the remaining balance to a better paying cash ISA. Make sure you use the transfer process - don't just take the cash out and pay it into a new one. A list of available cas ISAs is maintained by Kazzaa here: http://forums.moneysavingexpert.com/showthread.html?t=401374

If you pay tax and plan to keep it in savings for a while, you are probably best sticking with ISAs. Either keep a track of the interest rate as it changes (and move elsewhere when necessary) or choose a fixed rate/term one (but note that you won't be able to withdraw funds from it until the end of the term).

Generally, current accounts don't come into it (except for a few specific cases where the provider requires you to have their current account in order to hold their ISA product).

Reaper

You can move an ISA to a better paying provider. The people you are moving to will handle the move once you have provided your details. That's better than withdrawing it yourself otherwise when you put it back in you are using up this year's allowance.

Some providers will not accept transfers so I suppose if you are not planning to use this year's allowance you could actually withdraw it and then open it as a new account with the next people. Not something I'd normally recommend but you are well within the limits.

You might find this thread useful. The first post lists all the best ISAs out there:
http://forums.moneysavingexpert.com/showthread.html?t=401374
Or read Martin's ISA article here:
http://www.moneysavingexpert.com/savings/best-cash-isa

larmy16

I think he was trying to kill two birds with one stone, saying I would get more interest if I put the money into a new current account with them.

May I ask just two more questions please? If I transfer this ISA elsewhere, this means that I cannot add any more money to it - is that right?

If I drew it out I could start a new ISA for this tax year?

To save any more money I would have to open a new cash ISA? Not that I have any to save at the mo. No further questions!

Thanks guys.:)

KingL

You have an allowance of £3600 for this tax year. You could

1) pay upto another £3600 into the old one then move it all somewhere else (using the transfer process)
2) transfer the old one (£1700) somewhere else then pay upto another £3600 into it
3) transfer the old one somewhere else then open a third one and pay upto £3600 into that (although there's not much point in having a third one).

technically, you could close the old one, open a brand new one, pay the £1700 into it. In that case, you would only be able to add a further £1900 this tax year

The only other restriction is that if you choose a fixed rate ISA, you might not be allowed to drip feed funds into it. You will have to pay/transfer everything in a single step when you open it.