Open cash ISAs with two providers in one year?

J10

Hi, would appreciate some advice on the following. I want to open a cash ISA with a new provider to transfer in previous years' cash ISAs . The one I want to open is fixed for 3 years and I don't want to lock away this year's allowance in it, so I would not be adding to it after transferring in my old ISAs. My question is, will I also be able to open a further cash ISA this year with a different provider for this year's allowance? Thanks!

jh2009

Simple answer.... Yes.

You can only pay new money into one ISA a year but what you do with historical balances is up to you.

derrick

jh2009 wrote: »

You can only pay new money into one ISA a year but what you do with historical balances is up to you.

I have a Lloyds FRISA maturing on 19th May 2010, on Tuesday I deposited £5100 into this ISA, (as it allows), does this mean if on maturity I find a better rate than what Lloyds offer I can't transfer all the money into a new one?

jh2009

On maturity you are free to transfer this ISA to another ISA. You could if you wanted transfer it as many times as you want!

The only thing you cannot do is that now you have contributed the maximum to an ISA this year pay any more into any new cash ISA.

jh2009

I note you have paid the full £5100 into your lloyds ISA.

I know this doesnt affect you, but in case it affects anyone else, what happens if you'd paid say £3100 into the lloyds ISA and had £2000 scope but wanted to transfer your ISA before paying this extra £2000?

If you then transferred your cash isa before paying this extra £2000, my understanding is that after completing any transfer to another cash ISA, you may contribute the £2000 to the new ISA that has accepted the transfer. This is as the status of your primary isa you may contribute to would also transfer. This is the only way you could pay into two cash isas in one tax year.

derrick

jh2009 wrote: »

On maturity you are free to transfer this ISA to another ISA. You could if you wanted transfer it as many times as you want!

The only thing you cannot do is that now you have contributed the maximum to an ISA this year pay any more into any new cash ISA.

Yep, understand the bit about can't "pay any more into any new cash ISA", but wasn't sure about your "You can only pay new money into one ISA a year but what you do with historical balances is up to you.", as I have put new money into this years ISA, but if you are saying I will be able to transfer if required, then that is OK. Thanks

derrick

Didn't want to open 2, just hoping to keep it all together as one.

jh2009

derrick wrote: »

Yep, understand the bit about can't "pay any more into any new cash ISA", but wasn't sure about your "You can only pay new money into one ISA a year but what you do with historical balances is up to you.", as I have put new money into this years ISA, but if you are saying I will be able to transfer if required, then that is OK. Thanks

By this i mean you could in theory transfer existing ISAs from past years as many times as you like in a tax year.

you will be able to transfer if you want. And if you wanted to transfer 6 months later (unlikely) you could again.

Mikeyorks

jh2009 wrote: »

This is the only way you could pay into two cash isas in one tax year.

You can add the balance of £2k either before or after you do the transfer.

But you're not (if you do the latter) 'paying into two ISAs' under those circumstances. As the ISA you transfer is essentially the same ISA when it arrives at the new destination ..... you've merely switched it between providers. You just need to be cautious that the new T&Cs don't inhibit you adding the balance of funds as e.g. would normally be the case if you transferred it to a fixed period / fixed rate which only accepts a single deposit. In such a case you add the funds prior to transfer.