Cash ISA question help please!

tashalove

Hi guys,

I think someone has already posted a similar case to mine but I just want to double check before I apply for a different ISA.

I have been with A&L Direct Issue 4 since last year but recently checked their interest rates. Offering 0.10% which is terrible, I haven't even been informed at all re the new interest rates.

Anyway, I'm thinking of moving to a fixed ISA with Halifax but I have taken £300 out of my ISA since April 09 AND just transferred in £100 yesterday. Is it okay to transfer? Have I broken the 'one cash ISA per year rule' by doing this?

I have also been looking at some Regular Saving accounts which offer 5% interest for a fixed term. Would saving money into these Regular saving accounts be better than saving in a fixed cash ISA?

Thanks!

Tasha x

alastair_h

Say you had £1,000 in for 2009/10 financial year you would only be able to pay in a further £2,500. Leaving £3,300 in total. If it was previous years ISA contributions you were taking out then obviously you couldn't top this back up.

Yes it's ok to transfer. No by transferring this doesn't count as paying into a 2nd ISA.

The best FRISA is around 3.25% JHB and variable rate 2.75% IF, see link for current information - tax free.
On the Regular Savers of 5% (Halifax and LTSB), as you only have all of the money in there for the last month earning 5% so the interest rate is effectively 2.5% over 1 year AND this is taxed - so minus 20% for normal rate tax payer, so tax free for me every time :rolleyes:

http://forums.moneysavingexpert.com/showthread.html?t=401374

tashalove

Thanks Alastair.

I have just come across one of the conditions of applying to another ISA.

I have to make sure that:

You have not contributed to another Cash ISA in the same tax year that you subscribe to this Cash ISA

So, I haven't broken this rule by transferring money in and out of my current cash ISA?

alastair_h

No you haven't broken the rules. That means you don't pay into an ISA with say Lloyds and open and pay into another with Alliance & Leicester for example.