ISA withdrawal or transfer?

zoglet

We currently have money put away in a Santander Easy Access ISA from last year. Looking to increase the rate as at end of bonus period. Have seen that Santander are doing a new ISA over 3% but only for new money not transfers.
Was thinking is it possible to open this new ISA with a £1 or whatever the minimum is. I have been paid the interest on the ISA from last year, can I withdraw the money before the end of this tax year say 2nd April and then use it as new money to pay into the new ISA on 6th April? :think:

Lokolo_2

zoglet wrote: »

We currently have money put away in a Santander Easy Access ISA from last year. Looking to increase the rate as at end of bonus period. Have seen that Santander are doing a new ISA over 3% but only for new money not transfers.
Was thinking is it possible to open this new ISA with a £1 or whatever the minimum is. I have been paid the interest on the ISA from last year,

IF you were to put £1 into an ISA, then you will have contributed to an ISA in that tax year and you won't be able to open and contribute to another one in the same tax year, however you will be able to transfer it.

Which leads onto the second point, that you could have a look at ISA's which accept transfers from previous years ISA's, they may have slightly lower rates unless you are able to lock the money away for a longer period, however you can transfer your poor rate paying ISA right now to get a better rate.

zoglet wrote: »

can I withdraw the money before the end of this tax year say 2nd April and then use it as new money to pay into the new ISA on 6th April? :think:

Yes, you can withdraw the money and deposit it again next tax year, BUT this means you lose that allowance from previous years, it mainly depends on if you think you might have more than £5340 to deposit into an ISA next tax year, as that will be the ISA allowance for the next tax year and anything you withdraw and deposit next tax year will count towards that allowance.

zoglet

Mmmm have sat and thought about this now, as we've maxed out our ISA's for this tax year we're still unable to open a new one even with a £1, will have to wait until 6th April I'm guessing? We won't be able to put anywhere near our allowances away for 2011/2012 as we're doubling up on the mortgage payments at the mo instead-should have it paid off in 3 to 4 years :j
Thanks for the response, think we'll hold off for a bit longer see if any new ISA's turn up with slightly higher transfers rates-if the base rate increases I'm sure there'll be some

emeraldbugle

What rate is your Easy Access ISA, is there a bonus period on the rate, when does this end?

I would transfer it to Halifax, currently 3% and they accept transfers. I would open it online, say no to have you subscribed this year. Then do not deposit any money, but fill in the transfer form.

Lokolo_2

zoglet wrote: »

Mmmm have sat and thought about this now, as we've maxed out our ISA's for this tax year we're still unable to open a new one even with a £1, will have to wait until 6th April I'm guessing?

Correct, If you want to deposit new money into a Cash ISA you'll have to wait until 6th April. Although you can transfer your current ISA whenever you like!

zoglet wrote: »

We won't be able to put anywhere near our allowances away for 2011/2012 as we're doubling up on the mortgage payments at the mo instead-should have it paid off in 3 to 4 years :j
Thanks for the response, think we'll hold off for a bit longer see if any new ISA's turn up with slightly higher transfers rates-if the base rate increases I'm sure there'll be some

That's good that you are overpaying the mortgage as it will save you alot of money on interest payments :j

Alot of people are also waiting, as you said, for higher ISA rates to appear as it's close to the deadline now and BOE interest rates could well rise too :beer:

zoglet

Bonus rate finishes round the 25th March so will probably leave money where it is for now and see what happens with the BOE rate-see who's got the best rate then. Thanks everyone. :T

zoglet

Right my plan of action is as follows:-

Transferring my 2010/11 Santander ISA to Nationwide 3.1% ISA
Have also opened Santander 3.3% Flexible ISA
Will get husband to open Santander 3.5% Loyalty ISA
Husband has 8k in 2010/11 Santander ISA so thinking to move (not transfer) £5340 from husband's 2010/11 Santander ISA on 5th April into our Santander Savings Account, then move to his 3.5% Loyalty ISA on 6th April, then move (not transfer) the other 3k into our Santander Savings on 5th April then into my 3.3% Flexible ISA on 6th April??????
I know this will only leave us a remaining ISA allowance of about 2k for 2011/12 but to be honest we're not going to have any more than that at our disposal to invest.

Lokolo_2

zoglet wrote: »

Right my plan of action is as follows:-

Transferring my 2010/11 Santander ISA to Nationwide 3.1% ISA
Have also opened Santander 3.3% Flexible ISA
Will get husband to open Santander 3.5% Loyalty ISA
Husband has 8k in 2010/11 Santander ISA so thinking to move (not transfer) £5340 from husband's 2010/11 Santander ISA on 5th April into our Santander Savings Account, then move to his 3.5% Loyalty ISA on 6th April, then move (not transfer) the other 3k into our Santander Savings on 5th April then into my 3.3% Flexible ISA on 6th April??????
I know this will only leave us a remaining ISA allowance of about 2k for 2011/12 but to be honest we're not going to have any more than that at our disposal to invest.

I think that sounds like a good plan of action, If you really won't have much more new money to put into ISA's then you can just "move" the money manually into ISA's that don't accept transfers in but offer better rates :j