Merge 2010/11 ISA with savings into 2011/12 ISA?

Raffers

OK, I'm looking for some advice and my current situation is as follows:-

I have a 2010/11 Cash ISA which I opened in late April 2010 and filled. I also have monies in a separate savings account with the AA. I have received the interest for the ISA already. I am of the understanding that the interest rate of the ISA was only for a 12 month period, so that it will no longer remain an attractive product to remain with.

So, I'm looking around at alternative ISA's and was wondering whether I should grab hold of a 2010/11 one to transfer over to or wait until 6 April 2011 to see whether ISA rates will improve next tax year?

Thanks for any help.

Lokolo_2

Raffers wrote: »

OK, I'm looking for some advice and my current situation is as follows:-

I have a 2010/11 Cash ISA which I opened in late April 2010 and filled. I also have monies in a separate savings account with the AA. I have received the interest for the ISA already. I am of the understanding that the interest rate of the ISA was only for a 12 month period, so that it will no longer remain an attractive product to remain with.

So, I'm looking around at alternative ISA's and was wondering whether I should grab hold of a 2010/11 one to transfer over to or wait until 6 April 2011 to see whether ISA rates will improve next tax year?

Thanks for any help.

Transfering your current ISA to another provider is certainly a good idea as your rate will have plumeted soon, but it is anyones guess whether any better ISA's will come out after April 6th, it's possible that rates may even drop when we hit the new tax year!

Are you considering a fixed rate ISA or not? If you are willing to lock away your money for a longer period then some of these can offer better rates and most accept transfers in!

Raffers

Well, the ISA I'm currently with (Alliance & Leicester/Santander) was a FIXED ISA for 1 year. I'm open to use one of those again, but am of the opinion that interest rates have surely got to rise soon (am I wrong?) and therefore attaching it to a variable rate sounds appealing.

Another query pops up in my head here. Since I maxed the ISA at the start of this tax year and have already gained the full interest on it, would I suffer in anyway if I withdrew all that money to my current account? I'm thinking that it would give me a greater scope of product choice if I appear to have 'new money' going in.

Thanks again.

blueberrypie

Raffers wrote: »

Well, the ISA I'm currently with (Alliance & Leicester/Santander) was a FIXED ISA for 1 year. I'm open to use one of those again, but am of the opinion that interest rates have surely got to rise soon (am I wrong?) and therefore attaching it to a variable rate sounds appealing.

Another query pops up in my head here. Since I maxed the ISA at the start of this tax year and have already gained the full interest on it, would I suffer in anyway if I withdrew all that money to my current account? I'm thinking that it would give me a greater scope of product choice if I appear to have 'new money' going in.

But that "new money" will count towards your 2011/12 allowance. If you are absolutely sure that you will not use your 11/12 allowance - you are certain that no long-lost uncle will leave you some money, you won't sell your car, you won't get a pay-rise or an insurance payout or a gift from someone - then you could indeed get a better rate from an ISA which doesn't accept transfers in. For every 0.1% increase, you'd gain by about £5. If there's any possibility that you might want to use your 11/12 allowance - not worth it.

Raffers

Ah...

So, if I have understood you correctly, I can do the following:-

• Transfer my current 2010/11 maxed ISA plus interest to the best current provider.

• Wait until 2011/12 tax year starts.

• Transfer over the savings from my other savings account (obviously, assuming the ISA rate is preferable).

Thus allowing me to make ISA interest on last years allowance plus the monies previously held in my savings account elsewhere?

That to me sounds like a plan :j so I'd best get a wriggle on???

blueberrypie

Raffers wrote: »

Ah...

So, if I have understood you correctly, I can do the following:-

• Transfer my current 2010/11 maxed ISA plus interest to the best current provider.

• Wait until 2011/12 tax year starts.

• Transfer over the savings from my other savings account (obviously, assuming the ISA rate is preferable).

Thus allowing me to make ISA interest on last years allowance plus the monies previously held in my savings account elsewhere?

That to me sounds like a plan :j so I'd best get a wriggle on???

Yes, that's right.

You don't have to put your "new" funds into the same ISA that you transfer the ISA funds into though, so you can still go for the best-paying ISA for your new funds, whether it accepts transfers or not.

Raffers

This is great news. So I manage to get the best of both worlds! I'm just glad sites like this are here to clarify things (and people like you, of course!). I could have gotten things sooo wrong by just guessing what I thought was the right thing to do.

Many thanks.:beer: