ISA's - Is there any point in rushing before the end of Tax Year?

oasis_mad

Hi,

I am a Barclays Customer and have £3600 available to transfer to a cash ISA if convinced. How much interest will I actually make in this Tax Year (09/10) with 4 days to go. I'm guessing not much as Barclays Golden ISA pay the interest monthly.

Am I better off just waiting for the new tax year and setting one up (provider tbc) to the new limit?

Apologies. This is the first time I have looked into using ISA's and wondered what the big end of year countdown is all about on the MSE website.

OM

scottishblondie

I think the point of the countdown is to remind you to "use it or lose it". At this point the interest is pretty unimportant as it would be barely anything, even in an ISA with a decent rate. The aim of putting money into an ISA now would be to protect future interest from the taxman. At this late stage it is probably only worth rushing to get one if you want to preserve your full 2010-11 allowance of £5100 for use next year.

If in doubt I would say to use it rather than lose it, set one up online with Barclays now and transfer the money ASAP - you can transfer the money to a better rate later, or withdraw it if you change your mind about wanting an ISA.

hallmark

Of course it's worth it. You can always take it back out of an ISA. But if you don't use your allowance you miss (that year's) forever.

david78

Its only worth investing before the end 5 April, if you think you will want to use this year and next years allowance. If you don't have much to save it doesn't matter much whether you invest now or after 5 April.

oasis_mad

david78 wrote: »

Its only worth investing before the end 5 April, if you think you will want to use this year and next years allowance. If you don't have much to save it doesn't matter much whether you invest now or after 5 April.

Ah its starting to make more sense to me now. So If I put £3600 into a Barclays ISA now and leave it there, it will earn tax free interest. I could also take out another ISA with another provider in the new tax year (06 Apr) and earn tax free interest on that also??? Please confirm if I'm right.

Many thanks for the comments

glider3560

oasis_mad wrote: »

Ah its starting to make more sense to me now. So If I put £3600 into a Barclays ISA now and leave it there, it will earn tax free interest. I could also take out another ISA with another provider in the new tax year (06 Apr) and earn tax free interest on that also??? Please confirm if I'm right.

Many thanks for the comments

Absolitely correct

And after 6th April, you can pay in £5,100 - in addition to whatever you've paid in before 5th April.

oasis_mad

glider3560 wrote: »

Absolitely correct

And after 6th April, you can pay in £5,100 - in addition to whatever you've paid in before 5th April.

What, into the same ISA??

glider3560

oasis_mad wrote: »

What, into the same ISA??

Yes. Your choice: you can pay it into the same ISA or open another.

So you can pay in £3600 before 5th April then another £5100 after 6th April. Therefore you could have a balance of £8700 on 6th April!

oasis_mad

All sorted, first ISA set up.

Thanks for all comments.

OM