When to get an ISA

KLee

I apologise in advance if this question is ridiculously easy/obvious but I need to clarify that, having read all the forums and MSE, I fully understand the ISA.

I have £1600 in savings to put in an ISA and can probably put in another £2000 before April 5th. Therefore I will get tax free savings on £3600. Will that be a year's worth or just for the 3 months it has been in the account? After April 5th a new tax year starts and a new allowance. Can I put the 2011-12 allowance in the same ISA if the rate is still good or do I have to open another ISA? I believe you can't have more than 1 ISA in one year - is that right?

If you can help me I'd be very grateful

dunstonh

Will that be a year's worth or just for the 3 months it has been in the account?

Interest accrues daily for the days you have it in the account. It would be illogical to expect to be paid interest for a period when you didnt have the money in the account.

Can I put the 2011-12 allowance in the same ISA if the rate is still good or do I have to open another ISA?

You can do either of those.

I believe you can't have more than 1 ISA in one year - is that right?

correct but with a few caveats assuming you are ignoring transfers and S&S ISAs and not looking at previous years built up.

dzug1

You will only get interest for the time money has been in the account. Think about it - if you got a whole year's interest everyone would open their ISA on 5 April.

Your 2011-12 can (with most providers) go in the same account. Technically it's a new ISA but that needn't bother you.

And you can only pay into 1 ISA per year - or two if you have an S&S ISA as well.

KLee

Ha, thanks for the quick reply and the direct advice!