Can someone help me with ISA's please?

xangeleyes

I have read through the 'Banking Saving' page on the main MSE site, but I'm still a tad confused

My husband opened up a Post Office ISA account some time last year and all that was put in there was £5 - never got round to saving.

Anyway, we are wanting to actually use it now, but I've read about them only being for a year...is that true?
Do I have to re-open it? Does it have to be with them? Or is this where the 'transfer' details come into it?

If I have an ISA and save, for example, £2,000, can I draw it out at anytime? Or do I need to give 7 days notice??

I understand - I think - that if I did draw out £2,000, I could only put in £3,000 something for the rest of that year as there is a limit.

I was wondering if they still did ISA's where you had to give 7 days notice? I'm so bad at saving, so this would be great for me lol.

ALSO - (sorry) if I withdrew £2,000 could it be put straight into another 'normal' bank account? Don't fancy walking around with that cash on me.

Loads of questions - sorry, but I will appreciate all the help you can give me.

THANK YOU AGAIN!!!

Lokolo

ISAs aren't for 1 year, so not sure why you think that.

Each tax year you get an allowance of £x amount, this year it is £5,430.

You can deposit up to thie amount. Withdrawals do not add back to your allowance, so if you deposit £2,000 your allowance goes down to £3,430, anything you withdraw will not add back to this allowance.

There are notice ISAs but not 7 day ones. However it does take a number of days to withdraw the funds if they are internet only and you do not have other accounts with them (example, my Halifax ISA would take 3 days to get to my HSBC account) as they go by BACS transfer over the net.

bigfreddiel

xangeleyes wrote: »

I have read through the 'Banking Saving' page on the main MSE site, but I'm still a tad confused

My husband opened up a Post Office ISA account some time last year and all that was put in there was £5 - never got round to saving.

Anyway, we are wanting to actually use it now, but I've read about them only being for a year...is that true?

LOKOLO -you just beat me to it!

The account will still be open - you can withdraw any amount you wish - as long as there is sufficient funds.

Baically you can save £5340 in a cash ISA each year.

You can use any ISA provider you like but only one per year

You could use your existing account if you wish for this year

If you withdraw funds AND you have paid in £5340 then you cannot pay anymore into the ISA even though you have taken some out.

You can transfer to any other provider you like as long as they accept transfers.

You can transfer previous years ISAs to a provder and open the current year's ISA with another provider to fund this year - it doesn't have to be the same provider. In fact you can transfer previous years ISAs toasmany new providres as you wish, but most people consolidate funds to get higher rates.

Never ever withdraw money to pay into a new ISA because you will be using up your £5340 allowance - always transfer.

You can transfer a cash ISA to a stocks and shares ISA but not vice versa

And thats about it - always seek out the highest rate (usually fixed rate ISAs (FRISA) which pay a higher rate as long as you do not touch your funds for an agreed period of time, anything from 18months to 5 years) and transfer previous years ISAs as well as paying in this years allowance as a lump sum or drip feed as and when you can.

Its all very simple, its just that most people just don't explain it properly.

I hope that helps.

fj

xangeleyes

OK, thank you both very much!

One other thing :oops: Is having an ISA a risk? Will I lose money? I don't mean loosing money because the provider has got to pot or something. I read somewhere that the money gets put into shares, so you could turn out with less than you put in - or is that a CHOICE?
I'd rather it didn't go into shares, I hardly have enough money as it is so I want to save everything that I've got

Sorry for the questions, but you people have been FAB!

le_loup

No risk with a Cash ISA.
But you can have a Stocks & Shares ISA which could lose you money.
You have a Cash ISA and if you stick with those, you're OK.

psychic_teabag

ISAs remain tax-free after opened, but frequently there's a bonus rate that drops after a year - perhaps that's where you heard that ISAs only last for a year.

Also, I think it is possible for an ISA to require a reregistration before you can deposit more into it. I think this tends to be if you open it in one tax year, don't deposit into it the next tax year, but try to use it again. So eg if your hsband opened the ISA in March 2010, it will have gone the entire 2010-11 tax year unused, and could require reregistration to allow you to use it this 2011-12 tax year.

xangeleyes

Can his old ISA just be closed down?? It's only a fiver in there - not sure if there is any point transfering it.
Seen other ISA's that look good

Thank you so much. My mind is at rest now lol.
You've all been so lovely!!!!

le_loup

For a fiver ... close it.

Vortigern

It's only a fiver and very little interest. Just close the account - as you say, transfer is too much hassle and of no benefit here.