WHEN to transfer ISA's - Confused.

bobbyposh

Actually, I have just checked moneysupermarket.com and Halifax seem to be offering a decent interest rate for a change! So thanks for your advice, Stompa.

Witlim

Im really confused myself and would really appreciate advice.

I phoned up my bank (smile.co.uk) and was informed I can add £303.09 for this years ISA before it maxes out. My question is should I bother as they informed me the interest is a lousy 0.5%!!

Should I just wait a few months for a better ISA with another bank?

Grateful for views

bobbyposh

Witlim wrote: »

Im really confuse myself, would really appreciate advise.

I phoned up my bank (smile.co.uk) and was informed I can add £303.09 for this years ISA before it maxes out. My question is should I bother as they informed me the interest is a lousy 0.5%!!

Should I just wait a few months for a better ISA with another bank?

Grateful for views

Don't delay - open a Halifax ISA Direct Reward today with the £303 you have got left and transfer everything out of smile at the same time. You can do it all online. Doesn't matter how much you've got in your smile ISA - it won't affect next year's allowance.

psychic_teabag

I don't think you can do that... until the transfer is complete, you can't add money to the ISA - doing so would count as funding a second ISA in the same year. (Assuming bobbyposh meant you to do it as a transfer, rather than just withdrawing the cash and taking it to Halifax in a paper bag. There is such a thing as a self-transfer but it's just not worth the fuss.)

So I'd suggest putting your £303 into the smile ISA now, and immediately initiate a transfer to Halifax. Halifax will pay the interest while it's transferring (due to the promise mentioned above) so you get that rate immediately in addition to the 0.5% from smile.

The only complication with going to Halifax is that in the online transfer form, they ask you if you've already funded a cash ISA this year. If you tell the truth and answer yes, they won't let you do the transfer. (Or at least I've heard this is the case. Haven't encountered it myself.)

Funkyfreddy

Witlim wrote: »

Im really confused myself and would really appreciate advice.

I phoned up my bank (smile.co.uk) and was informed I can add £303.09 for this years ISA before it maxes out. My question is should I bother as they informed me the interest is a lousy 0.5%!!

Should I just wait a few months for a better ISA with another bank?

Grateful for views

Getting the £303.09 into your current ISA (I take it you have already funded this Smile ISA with £4796.91 this tax year) and utalising your full 2010/11 Cash ISA allowance regardless of the interest rate it is would immediatly earn is that is has the potential to ean Tax Free interest for however many years you choose to leave it there...and at higher rates than you are getting now - just transfer.

After the 5/4/11 you have lost the opportunity of £303.09 capital getting into your cash ISA "pot".

FF

K9ine

Funkyfreddy wrote: »

Correct - there is no "Maximum" allowance other than the maximum that can have been added each year. (somebody will correct me if I have the Cash ISA alowances wrong)...

Ooops ISAs started in 1999/2000 plus you missed some years.

1999/2000: £3,000
2000/2001: £3,000
2001/2002: £3,000
2002/2003: £3,000
2003/2004: £3,000
2004/2005: £3,000
2005/2006: £3,000
2006/2007: £3,000
2007/2008: £3,000
2008/2009: £3,600
2009/2010: £3,600
2010/2011: £5,100
Total: £39300 plus accrued interest/bonus plus Tessas

I didn't subscribe to an ISA every year but I have accrued over £8,000 in interest over the years too :O)

I am now transferring back and forth between Halifax and Nationwide so that I get 'double interest' for most weeks of the month! It's a bit of overkill and maybe not quite the idea of the ISA Promises but I could gain perhaps an extra £700 over the year in addition to my expected interest of approximately £1350.

scottmcgarvey

If you have an existing ISA, that is still paying a good, competitive rate, you can add to it (if you've already put in the max allowed in that tax year) - got that bit.

What about the new (coming) tax year?

Could I (for instance), deposit £3,000 into the existing (old) ISA and open a new ISA with a different bank, and put the rest of that year's allowance into it? (£2,340)?? Or am I allowed to put money into one ISA only?

Many thanks in advance

psychic_teabag

K9ine wrote: »

I am now transferring back and forth between Halifax and Nationwide so that I get 'double interest' for most weeks of the month! It's a bit of overkill and maybe not quite the idea of the ISA Promises but I could gain perhaps an extra £700 over the year in addition to my expected interest of approximately £1350.

I was thinking about trying that trick, but figured they'd get annoyed pretty quickly. But even doing it a couple of times a year would give a boost.

Funkyfreddy

K9ine wrote: »

Ooops ISAs started in 1999/2000 plus you missed some years.
[....]

I did didn't I - Doh !

FF

Alter_ego

Funkyfreddy wrote: »

Follow the transfer process and you "old" ISA will be closed as a matter or course.

FF

True, but not if you do a partial transfer.