Can a person have more than one ISA account with multiple banks?

Cowboy.

Hi all,

I have an account with a bank but am looking to open another with another bank who has better rates. Is it legal to open more than one account with multiple banks?

Stupid question but just wanted to check!

AmTheMan87

You can have more than one ISA with multiple lenders, however, you can only pay into ONE each tax year.

Some people tend to invest in a fixed rate ISA (normally 12mths) with a provider that has the best rates at that time and subsequently open another elsewhere the following year, again, to get the best rates.

The good thing is that even if you open another elsewhere, the rest are still tax free and you can still fix them agian for another year etc...

McKneff

You can open as many Cash Isa s as you like, transfer as many times as you want but you can only CONTRIBUTE to ONE in any one tax year.

Cowboy.

Sorry but what do you mean by paying into ONE account in any one tax year? An example would be great

xrjtg

It might help to think of it like this. You have two cash ISA wrappers: one for this year's money, and one for all of the previous years' money combined.

All your current year's money has to stay together, but you can move it around and keep paying into it in the different places provided you always fill in the correct transfer forms, and don't deposit more than the annual limit in total.

The previous years' money can be treated much more flexibly, and it can be broken up into as many pieces as you like provided the bank's involved are happy to accept partial transfers.

So you can have lots of ISAs, but one of them must always be labelled the "current" ISA, and contain all the money that you put in this year.

evilplan

I'm really confused by this, because it's one of those things where people who know what they're talking about don't use language that makes sense to people like me, who don't

I understand that I have an allowance every year, but that I can have ISAs from different years.

But several websites have told me that I can pay *cash* into one ISA while also having a stocks & shares ISA - in other words, paying into 2 different ISAs in a single year.

So can someone clarify the position with cash AND s&s - can I open 2 different ISAs, one which I pay into for my cash allowance, and one which I pay into my S&S/remaining allowance?

Thanks

xrjtg

Yes. You can think of S&S ISAs as being a whole separate type, with the following extra rule: in any given year, any amount of your Cash ISA allowance that you don't use you can use for your S&S ISA instead.

This is consistent with the fact that Cash ISAs can be transferred into S&S ISAs, but not the other way round.

evilplan

Ah, that makes sense. It's easy to see why it comes across as ambiguous - I actually searched hard for an answer and ended up more confused

Thanks!

MoneySaverLog

It's because HMRC love to complicate things as much as possible the rules are that you can contribute £10,680 this tax year (April 6-April 5th 2012)

This can be split between a Stocks and Shares ISA and a Cash ISA in the current tax year. The most you can contribute to a Cash ISA though is half of this amount i.e. £5,340

You can only have one Cash ISA and one Stocks and Shares ISA active in any one tax year.

Previous ISA accounts have to be transfered into another ISA provider using the new providers transfer form. DO NOT WITHDRAW MONEY to do the transfer yourself. You'll lose the tax wrapper of the ISA, Use the transfer form.

Not all providers will accept transfers into their ISA's.

ISA Rates appear to drop after 12 months, so you have to be prepared to do transfers once a year. You could also have many tax free ISA accounts over a number of tax years sitting there in separate ISA's though you'd probably get a better rate if you transferred. You cannot add more money to these old ISAs if you've not made full use of your allowance by 5th April (end of the tax year).