when should I transfer ISA, please?

Sennen

Hi,
Have read around, but my brain is starting to hurt! Would be very grateful for help, please. - I have Egg ISA (opened Aug 2008 with £3, 600; balance as at today £3, 719) with v low interest rate. I want to transfer to Nationwide 2.75 (1.75 when bonus comes off in June 2011). Should I do this now, or wait until after 6 April, please?

I'm confused. Is it better to wait until after 6 April, so that I could potentially save an additional £5, 100 in the new financial year (I won't actually be able to afford to save this much, but could add some funds)?

Thanks
Sennen

rb10

Initiate the transfer now (by asking Nationwide to do an ISA transfer).

Then, on or after 6th April, you can still add £5100 to the account.

Sennen

Thank you, rb10!

SFA_AOK

Sennen, transfers from non-Nationwide ISAs require paperwork to be sent through the post, so it is unlikely you will be able to transfer before 6th April. I think Nationwide's site says something to that effect as well.

However, it does not matter if you transfer the ISA after the 6th April, transfers do not count against your allowance for a tax year. For example, one person has an ISA from a previous year and transfers it to another ISA. They still have their full allowance for the year, so they could go elsewhere and open a new ISA if they wanted (and these tend to have better rates). However, if they closed the ISA and withdrew the money, puting that money into a new ISA would use up part of that year's allowance. So it's usually better to transfer as it doesn't affect your allowance for the year.

(The only way I could see that it would be benificial to close an ISA and open a new one was if you were 100% sure you wouldn't have any money to put into an ISA in a particular tax year, as you could get yourself a better rate with a new ISA rather than a transferred one.)