Earn 'Thanks' for answering these simple ISA questions...

markalanious

Q1. I have a santander easy access 3.3 ISA thingy. If I was to close the ISA half way through the year would I still have earnt interest on the money in it, or would I only get interest if the money stays in the account for a full year?

Q2. If interest is earnt in the ISA when I potentially close it after 6 months - would I get the interest straight away or would I have to wait till the end of the year to get it.

Q3. If at the end of the ISA year i've saved my full allowance in the ISA, then transfer it to another ISA to get the better rate - is that my full alowance for the year used up - i.e. I can't open another ISA and start saving £5340 again that year?

Thanks for taking the time to answer these simple questions, that i'm not clever enough to find out for myself!

talana

Ah, one of those ISA "thingys"!

1. You will receive interest pro rata for the portion of the year up to closure.
2. Interest will be paid on closure
3. Transfers do not count toward your allowance. You can open a further ISA and fill it up if you wish.

markalanious

Thanks for the help talana.

Can you confirm the following in relation to Q3 though:

If transfers don't count towards your allowance, does that mean I can transfer my ISA from this year (potentially full) into another ISA with a good rate, say ISA X at 3.3 and still add another £5340 to that ISA X and get the full 3.3% on all savings in it, potentially £10680?

Or would I need to transfer my existing ISA to ISA X and then open up ISA Y and start saving again in that?

Thanks

Mark

jem16

markalanious wrote: »

If transfers don't count towards your allowance, does that mean I can transfer my ISA from this year (potentially full) into another ISA with a good rate, say ISA X at 3.3 and still add another £5340 to that ISA X and get the full 3.3% on all savings in it, potentially £10680?

You need to clarify what you mean by this year. Tax year runs from April 6th to April 5th. If you use up the whole allowance in that tax year, then transfer it, you cannot add any more to it as you have already used up your full allowance.

The part where transfers don't count is where you have saved up in previous tax years and then transfer it this tax year, it doesn't count towards this year's allowance.

Lokolo_2

markalanious wrote: »

If transfers don't count towards your allowance, does that mean I can transfer my ISA from this year (potentially full) into another ISA with a good rate, say ISA X at 3.3 [STRIKE]and still add another £5340 to that ISA X and get the full 3.3% on all savings in it, potentially £10680?[/STRIKE]

You can transfer your ISA from this year to another provider, providing that the new provider accepts ISA transfers in, many don't.

You would not be able to add a further £5340 after having transfered this year's ISA, as you will have already used up this year's ISA allowance.

markalanious wrote: »

Or would I need to transfer my existing ISA to ISA X and then open up ISA Y and start saving again in that?

Thanks

Mark

You could do this as sometimes ISA's that only accept new money (not from ISA transfers) offer higher rates of interest, so you could transfer your ISA to another provider, and in addition open a new ISA (only next tax year though as from what you have posted, I gather you have already used up this years ISA allowance)

talana

markalanious wrote: »

If transfers don't count towards your allowance, does that mean I can transfer my ISA from this year (potentially full) into another ISA with a good rate, say ISA X at 3.3 and still add another £5340 to that ISA X and get the full 3.3% on all savings in it, potentially £10680?
Or would I need to transfer my existing ISA to ISA X and then open up ISA Y and start saving again in that?

It helps here if you don't overanalyse or overcomplicate things.
Transfers don't count towards your allowance, end of story.
Obviously if you've already used this tax year's allowance prior to transfer (as you seem to be saying) then the operative part is you've already used this tax year's allowance, and hence you can't add any more this year.
If you transfer funds from previous years however, then this years allowance is still available to you as normal and you can add it to ISA X or start ISA Y.

markalanious

Thanks guys,

I did mean what to do when it gets to April (i.e. Next ISA year)