ISA Advice

DD3006

Im currently looking at a cash ISA to try and set aside some savings now from what i already know i can invest up to £5100 into a cash ISA during any financial year?

If i then wanted to put more into savings i could open a stocks and shares ISA and invest a further £5100?

Questions ive got at the moment is....

1> If i open a Cash ISA now with £5100 can i open another after the 6th of April this year since technically they were both opened in separate financial years?
2> What are the risks if any with a CASH ISA (i think this is covered by the FSCS)
3> What are the risks if any with a stocks and shares ISA? (not sure this is covered by FSCS or not?)

Any help would be much appreciated.

Thanks

Lokolo

1) Yes

2) £85k per person per institution, so don't worry about this yet

3) You can come out with less than what you put in... so you put in £5,000, you can have £4,000 after 5 years for example.

DD3006

Thanks for the info, one more thing tho.... if i open a ISA now with one institution and fill it with the maximum of £5100 when i come to open the second after April 6th do u know if ill need to do this with another institution or could i open the second at the same place?

Thanks again

Newbie2saving

You can choose to open another account from the same or new provider (chase the best rate), but you may be only able to hold one of the type of product you have already bought if you have a fixed rate for example.

p00hsticks

Note that the ISA allowance is now increased in relation to the RPI, so next tax year (i.e from April 6th 2011) the total allowance goes up to £10,680, of which £5,340 can be in a Cash Isa.

dasherman

DD3006 wrote: »

Thanks for the info, one more thing tho.... if i open a ISA now with one institution and fill it with the maximum of £5100 when i come to open the second after April 6th do u know if ill need to do this with another institution or could i open the second at the same place?

Thanks again

You don't have to open another ISA at all, you can just put next years money into the one you already have.

jimjames

Lokolo wrote: »

3) You can lose more than you put in... so you put in £5,000, you can have £4,000 after 5 years for example.

I think I know what you mean but as it reads, it isn't factually correct.

You cannot lose more than you put in with an ISA. You could in theory lose everything you have put in but unless you are very unlucky and choose a spectacularly poor share such as Northern Rock you are more likely to lose a percentage as above and have £4000 left out of £5000 invested.

The reality is that with stock market investments they go up and down on a daily basis. Daily movements are not really relevant unless you are trading short term in shares. What you are really looking to do is to grow your investments long term, some years may be a bit up and others like 2008 a bit down but overall you want them to increase over the long term.

DD3006

dasherman wrote: »

You don't have to open another ISA at all, you can just put next years money into the one you already have.

So basically if i open a account today... and invest £5100 into that ISA i can add another £5100 after the 6th of april into the same ISA account?

Lokolo

jimjames wrote: »

I think I know what you mean but as it reads, it isn't actually correct.

You cannot lose more than you put in with an ISA. You could in theory lose everything you have put in but unless you are very unlucky and choose a spectacularly poor share such as Northern Rock you are more likely to lose a percentage as above and have £4000 left out of £5000 invested.

The reality is that with stock market investments they go up and down on a daily basis. Daily movements are not really relevant unless you are trading short term in shares. What you are really looking to do is to grow your investments long term, some years may be a bit up and others like 2008 a bit down but overall you want them to increase over the long term.

Sorry yeh I should reword it a little

leahciM

DD3006 wrote: »

So basically if i open a account today... and invest £5100 into that ISA i can add another £5100 after the 6th of april into the same ISA account?

Yes, but many ISA providers offer good bonus rates of interest for the first year of being with them - they do this to attract new savers.

More often than not, this rate drops to a ridiculously low level after the first year. (I think around 0.1% interest for most providers).

Therefore, while you can add your £5100 to the same ISA, make sure you check that you're still getting the rate that you signed up for originally.

If the rate has dropped, you can transfer the money in your ISA into a new ISA with a different provider - however, make sure you do this via the bank/institution and don't just take your money out manually and put it in a new ISA as this will count towards your total allowable amount.

If you transfer via banks then this counts as old ISA money being moved about and is not seen as new money and therefore, will not count towards total allowable yearly amount.

DD3006

im looking at Nationwides Cash E-ISA... basically fixed 2.80 % untill December 2011.. unlimited withdrawals and payins up to your annual allowance.

http://www.nationwide.co.uk/savings/cash_isa/eisa/default.htm?intcmp=Intcmp_0302

plan on putting in 5100 now and 5100 after 6th of april... am i right in saying that any interest on ISA's if left in their dont count to your annual limit either?