Advice on what to do?

Smithyster

Hi guys, just after some advice on what to do.

Basically, I have £1800 in a cash Isa with Natwest (only pays about 2%).
I have a further £2000 cash that i want to put in an Isa.
In the next couple of months I will be inheriting another £2000 which I also want to put in an Isa.

Now I'm not sure what to do. Should I:
1. Keep the existing money in the Natwest Isa, pay in the first £2000 and then leave that alone, and open a new isa for the inheritance and anything I can then save.
2. Leave the £1800 in the Natwest Isa and open a new cash Isa, then pay in the £4000 total cash and then any savings.
3. Pay the £2000 into my current isa, and transfer the then £3800 into a new isa, then add to that my inheritance £2000 plus any savings.
4. As above but pay the inheritance and any savings into a cash Isa and have 2 separate ones.

Anything else?
Any advice is much appreciated. I'm only 20 and my current issue is my ffirst one so still learning!
Sorry about any typos, sent from my phone.

Thanks Sam.

spikyone

Hi Sam,

My advice would be:

1. Transfer your Natwest money into a new ISA - 2% is not great. Under these circumstances, never withdraw the money as it will lose it's tax-free status, get your new provider to request the transfer.
If you can pay in your "further 2k" to the Natwest ISA before April 5th (when the tax year ends), then definitely do that before transferring. The best easy-access ISA that accepts transfers is the Halifax one (3% if you're not already a customer). There's no time limit for transfers, you can transfer at any time.

2. Open an ISA for your 2011/2012 allowance and pay the £2k inheritance into this new ISA. You mustn't pay anything in before April 6th as you have paid into another ISA already this tax year, but as long as you fund it with at least £1 on (or just after) April 6th, it should work out OK. Best easy-access ISAs for your new money are with the AA at 3.35% and Santander at 3.3% for non-customers.

The best route is normally to have 2 ISAs at once, one that you use only to transfer in your old money, and one that you use for the current year's allowance. The reason is that the best-paying accounts don't normally accept transfers in. As long as you only pay "new" money into one ISA in any tax year, that's perfectly OK.

Smithyster

Brilliant, thanks alot for the advice, ill get on to doing it over the next week.

Cheers