Unsure about begining to save

Dancarr56

Savingmummy

Thank you for finding that link for me.

I'll take a look when i get home from work.

Lokolo

Dancarr56 wrote: »

Oooo i finally understand it, thank you!

I am finally going to take charge of our incomings and make the most of them.

It may be considered "sad", but i am actually getting exciting at the thought of saving money.

Such a friendly and helpful community here.

Thank you all :beer:

The only time is gets boring is when you end up wanting to spend it all when you know you can't

Dancarr56

Baldur wrote: »

Yes.

No, the annual allowance only relates to new money subscribed, any interest earned is the tax-free element of a Cash ISA.

An ISA goes on earning tax-free interest on both the capital that you pay in, as well as on any accrued interest.

I see.

Thank you Bladur.

I finally understand the basics of how they work

Dancarr56

Lokolo wrote: »

The only time is gets boring is when you end up wanting to spend it all when you know you can't

Hehehe, i can imagine.

Dancarr56

1 last question before i forget.

Can i open more than one ISA account?

For example.

Lets "pretend" i have £2000. Would it be wise to put £1000 in one ISA and £1000 in another, and just keep adding to them equally (assuming they have the same interest rates)?

Thanks in advance.

Lokolo

Dancarr56 wrote: »

1 last question before i forget.

Can i open more than one ISA account?

For example.

Lets "pretend" i have £2000. Would it be wise to put £1000 in one ISA and £1000 in another, and just keep adding to them equally (assuming they have the same interest rates)?

Thanks in advance.

Not in the same tax year.

You can only contribute to one ISA each tax year.

So I could open HSBC ISA now and put money in. Then April 6th, new year, I will open a new ISA with Lloyds and put money into that. I can't open and put money in the Lloyds account before April 6th.

You can open new ISAs without limits, but you must not deposit new money into them.

Dancarr56

Lokolo wrote: »

Not in the same tax year.

You can only contribute to one ISA each tax year.

So I could open HSBC ISA now and put money in. Then April 6th, new year, I will open a new ISA with Lloyds and put money into that. I can't open and put money in the Lloyds account before April 6th.

You can open new ISAs without limits, but you must not deposit new money into them.

So keeping to your example,

After April 6th now that your Lloyds account is open, you can't add any money into your older HSBC ISA? and what money is left in the HSBC ISA is just there making interest until the year after where you decide whether to open another ISA, or contribute to either to Lloyds or HSBCs?

Lokolo

Dancarr56 wrote: »

So keeping to your example,

After April 6th now that your Lloyds account is open, you can't add any money into your older HSBC ISA? and what money is left in the HSBC ISA is just there making interest until the year after where you decide whether to open another ISA, or contribute to either to Lloyds or HSBCs?

That is correct.

Now, expanding your knowledge. You can transfer ISAs.

So you go about and you have your HSBC and Lloyds ISA. HSBC is 1% and Lloyds is 3%.

You think damnit, I want everything earning 3%.

If the Lloyds ISA accepts transfers (not all ISAs do). You can fill in an ISA transfer form with Lloyds. They then get the money from your HSBC ISA and put it in Lloyds. So you then have £10,200 + interest (£5,100 * 2), in the 3% Lloyds ISA.

Baldur

Dancarr56 wrote: »

So keeping to your example,

After April 6th now that your Lloyds account is open, you can't add any money into your older HSBC ISA? and what money is left in the HSBC ISA is just there making interest until the year after where you decide whether to open another ISA, or contribute to either to Lloyds or HSBCs?

You can transfer old Cash ISAs to new providers that offer a better rate and accept ISA transfers, by completing the new provider's ISA transfer form and letting them arrange the transfer.

Dancarr56

Lokolo wrote: »

That is correct.

Now, expanding your knowledge. You can transfer ISAs.

So you go about and you have your HSBC and Lloyds ISA. HSBC is 1% and Lloyds is 3%.

You think damnit, I want everything earning 3%.

If the Lloyds ISA accepts transfers (not all ISAs do). You can fill in an ISA transfer form with Lloyds. They then get the money from your HSBC ISA and put it in Lloyds. So you then have £10,200 + interest (£5,100 * 2), in the 3% Lloyds ISA.

Ahaaa, its all coming together.

Now, lets say i have had my HSBC ISA for 3 years, all 3 of those years were topped up with £5100, so i have £15,300 in my HSBC ISA.

BUT

I have only just opened my Lloyds TSB ISA, so my limit is £5100.

Am i right in saying that i won't be able to transfer since my limit isn't high enough? or is there some rules surrounding this that allows the exception?

Thanks again.