Santander 3.3%/3.5% Flexible ISA i3

dip86

I've never had an ISA before and have just applied online with santander with the zero balance option.

Once its opened I should be depositing as much as I can for my 2010/2011 allowance...correct?

Have I left it too late to get lots of interest - I'm really confused at how the interest is calculated.
It says daily..so at 3.3% AER does this mean I'll get pittance added March next year if I deposit say £1000 tomorrow up until the 5th April 2011.

What happens after the 5th April 2011? I've banked as much as I could towards my 2010/11 allowance. Can I freely withdraw the lot without affecting my allowance for 2011/12.
Can I keep the £1000 where it is and put in up to an additional £5340 on 6th April '11 for my 2011/12 allowance. If this is possible, would I get interest added on the full amount? (£6340 until 1st March '12)

Sorry if this all sounds long winded and confusing. I hope somebody can help!?

rb10

dip86 wrote: »

Once its opened I should be depositing as much as I can for my 2010/2011 allowance...correct?

Yes, the more that you can get in between now and 5th April (max. £5100), the better.

You can then add up to £5340 (on top of what's already in there) between 6th April 2011 and 5th April 2012.

dip86 wrote: »

Have I left it too late to get lots of interest

Nope

dip86 wrote: »

I'm really confused at how the interest is calculated.
It says daily..so at 3.3% AER does this mean I'll get pittance added March next year if I deposit say £1000 tomorrow up until the 5th April 2011.

They calculate interest based on your balance in the account each day.

So if you kept £1000 in there for exactly a year, then that would give you £33 at the end of the year (3.3% of £1000).

But if, say, you had £1000 for the first 10 months, and then £6000 for the final two months, then you'd get:
£27.50 (3.3% of £1000, then divided by 12 [to get the rate per month] and multiplied by 10 [for the number of months you had it in there]),
PLUS
£33.00 (3.3% of £6000 [=£198], divided by 12 [to get the rate per month], and then multiplied by 2 [for the number of months you had this balance]).
So a total of £60.50.

Note that for simplicity I've based the above on monthly calculations (for greater accuracy you need to divide by 365 days in the year, and multiply by the number of days you held that balance) and also assumed that interest is paid one year after the account is opened (which is not the case with Santander's ISA). The same principle applies, however.

dip86 wrote: »

What happens after the 5th April 2011? I've banked as much as I could towards my 2010/11 allowance. Can I freely withdraw the lot without affecting my allowance for 2011/12.

You are free to withdraw what you like, when you like.

Just remember that your annual allowance only takes account of what you pay in to the account. So if you pay in £5340 in 2011/12, and then withdraw £1000, you still can't pay any more money into an ISA in 2011/12.

dip86 wrote: »

Can I keep the £1000 where it is and put in up to an additional £5340 on 6th April '11 for my 2011/12 allowance.

Yes.

dip86 wrote: »

If this is possible, would I get interest added on the full amount? (£6340 until 1st March '12)

As covered above - you'd get interest on £1000 pro-rata for the first few weeks, and then on the full amount for the length of time that £6340 is your balance.

Nine_Lives

I'm lost & am hoping someone can help me out on this. Don't have many questions so i'll get started:

1. I know Santander get bad press, but is there any real reason why i should avoid Santander for this 3.5% ISA? (I have a current account with them which is running to get the £100 cashback at the mo)

2. The gf paid in some money for me today & while there asked if i could open an ISA in this tax year (10-11), but pay in £0 and instead credit it on 6th April.
They said yes this was ok.
She asked if i could do this online or would i need to make an appointment in branch.
They said i would NEED to make an appointment to open the account.

Yet i'm seeing people here saying it can be done online.

I'm confused.

kingwahwah

hi
just went through online process. I committed!

1) they only accept a cheque for non-existing account holders! I have my allowance for 10-11 to use. 3 days to get an account they say at the end. Am i too late to put £5100 by cheque into ISA? I guess just opening account does not protect 10-11 year.

2) why do they give you a cash card? just in case you can transfer buts out anytime?

I'll pop into branch friday to ask.

TA

PS Can I just close account down if I can not meet dead line?

rb10

K_P83 wrote: »

1. I know Santander get bad press, but is there any real reason why i should avoid Santander for this 3.5% ISA? (I have a current account with them which is running to get the £100 cashback at the mo)

Depends if you think it's worth the risk of having potentially poor service for the higher rate of return.

Personally, I think it's worth it.

K_P83 wrote: »

2. The gf paid in some money for me today & while there asked if i could open an ISA in this tax year (10-11), but pay in £0 and instead credit it on 6th April.
They said yes this was ok.
She asked if i could do this online or would i need to make an appointment in branch.
They said i would NEED to make an appointment to open the account.

Flexible ISA (3.3%) can be opened in branch, online or by phone.

Loyalty Flexible ISA (3.5%) can only be opened in branch or by phone.

kingwahwah wrote: »

hi
just went through online process. I committed!

1) they only accept a cheque for non-existing account holders! I have my allowance for 10-11 to use. 3 days to get an account they say at the end. Am i too late to put £5100 by cheque into ISA? I guess just opening account does not protect 10-11 year.

You shouldn't be too late. Remember that you have until 5th April to pay in the cheque (and the cheque only needs to be paid in by that date; it doesn't need to clear by then).

If they don't send you the account details through quickly though, then just leave that application, and either phone up or go into a branch. They should be able to open the account on the spot.

kingwahwah wrote: »

2) why do they give you a cash card? just in case you can transfer buts out anytime?

Just in case you want to use the account at an ATM.

kingwahwah wrote: »

PS Can I just close account down if I can not meet dead line?

Yes. You only commit to using it when you pay money in.

joyceyjo

Anyone know if the flexible isa 3.3% allows you to add to it in new tax year? I have recommended this isa to a friend for this tax year 10/11, so she is going to stick in £5,100. She will have £5,340 ready to invest 06/04/11, does anyone know if Santander have any weird rulings to say she has to put the new years allowance into a completely new isa or can she just add to existing isa (assuming this is still the best option in the new tax year)?

rb10

joyceyjo wrote: »

Anyone know if the flexible isa 3.3% allows you to add to it in new tax year? I have recommended this isa to a friend for this tax year 10/11, so she is going to stick in £5,100. She will have £5,340 ready to invest 06/04/11, does anyone know if Santander have any weird rulings to say she has to put the new years allowance into a completely new isa or can she just add to existing isa (assuming this is still the best option in the new tax year)?

Yes, she can pay her 2011/12 allowance into the same account, and earn 3.3% on the whole balance.

joyceyjo

Thanks rb10

Although i suppose from an interest point of view as the 3.3% runs for 1yr from the initial £5,100, to get a full year on the £5,340 she should open a second flexible isa. Thats if Santander will allow you open a 2nd flexible isa

rb10

joyceyjo wrote: »

Thanks rb10

Although i suppose from an interest point of view as the 3.3% runs for 1yr from the initial £5,100, to get a full year on the £5,340 she should open a second flexible isa. Thats if Santander will allow you open a 2nd flexible isa

But she could just transfer the whole account elsewhere at the end of the year, so she'd still be getting interest on the whole amount for a full year (and more!) after it was deposited.

Just put it all in the same account.

joyceyjo

If she opened flex isa today 23/3/11 £5100, then the rate would run out in 1 year. If she deposited £5340 6/4/11 into the same flex isa then again she would only get the 3.3% on the £5340 from 6/4/11- 23/3/12- not a full year.

But i guess its not going to make a huge difference- (approx 48p per day interest on the £5340) rates available elsewhere next year could be higher anyhow.