ISA newbie

CreditCruncher

I have £7k of cash in hand and I have never had an ISA before. I am considering an ISA (3% interest pa) in my name to deposit this year's allowance of £5340 and the rest in an ISA (3.2 % interest pa) in my wife's name.

1.) Can I deposit the whole £5340 as a lumpsum with my chosen ISA today or is there a limit on the max payment per month?

2.) What happens to this amount(and accrued interest) come next April 6th? i.e. will i continue to earn the 3% interest till the anniversary(31/05/2012) ?

3.) What the best moneysaving:money:way to treat this year's allowance (and accrued interest) come next year if I do not want to spend it?

Thanks in advance....:)

Lokolo

1) The limit is per tax year, that's it. So you are free to deposit it in one lump.

2) Yes. You will find that some providers pay interest on April 6th rather than on the anniversary.

3) It will continue to earn interest anyway, so just leave it if the interest rate is OK. If the interest rate is not the best one available, you can transfer it to a better paying one.

However on a side note - why is your ISA at 3% and your wife's at 3.2%? I assume the 3.2% is the Santander one, but why don't you get this one too?

kidmugsy

You could always try £5340 at the Coventry BS 5%, 5 year Fixed Rate ISA. The beauty is that the penalty for taking the cash out early is just 120 days interest. So even if you left it for just a year you'd get the equivalent of 3.3%p.a., with the option of leaving it for longer.

lisyloo

Note that most accounts these days are good for 12 months, so put a note in your diary to review in 11 months time.

CreditCruncher

Lokolo wrote: »

1) However on a side note - why is your ISA at 3% and your wife's at 3.2%? I assume the 3.2% is the Santander one, but why don't you get this one too?

TBH I am not a great fan of Santander....Wife is happy with them(typical):rotfl: