Fixed rate isas 25 August 2010 at 2:14PM edited 25 August 2010 at 2:21PM in ISAs & tax-free savings 2 replies 880 views

skaps

Hi i wanted to open a fixed rate isa but have a cash isa in my name that i opened and have used this tax year. Will I have to wait till the next tax year and also when you have a fixed rate isa for 5 years for example for those 5 years can you put in money into a non fixed rate isa? Also are there any fixed rate isas that allow you to make deposits during the fixed term?

KingL

skaps wrote: »

Will I have to wait till the next tax year and

You could transfer the existing one into the new fixed rate one (as long as the terms and conditions of both allow this). You can then pay upto your annual allowance into the combined fixed rate (assuming that you have some unused allowance left). You can't pay new money into both (separate) ones in the same tax year, but if you combine them into one, you can. If you want to transfer and pay new money into the resultant fixed rate, you will have to make it clear on the application that you are funding it through both routes.

also when you have a fixed rate isa for 5 years for example for those 5 years can you put in money into a non fixed rate isa?

Yes, you can open another ISA in the second year (variable or fixed rate). You can pay years 3,4 and 5 into this second one or open new ones in each of years 3, 4 and 5, or you can move the year 2 one into the year 3 one and pay year 3's allowance into the year 3 one, etc etc. Basically, as long as you only pay new money into one per year, you can do what you like (as long as the TnCs allow it)

Also are there any fixed rate isas that allow you to make deposits during the fixed term?

Generally not. Something like the Nationwide e-ISA is a variable rate with a fixed bonus until Jul 2011. You could put next years allowance into that. But it's not a fixed rate in the strict sense of the term.


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skaps

Thanks so much for that KingL that has made it much clearer and that has left me with lots to think about.