Min and Maxi ISA's.

shaz77_2

I currently have a min cash ISA that allows me to save £3000 per tax year.

I am thinking about changing to a Maxi Isa. Does my mini cash ISA need to be closed first or can I convert it to a maxi.

Incidentally are there any documents on this site about Maxi cash ISA's, Ive found some regarding Mini cash ISA's but not Maxi cash ISA's.

Cannon_Fodder

There isn't a Maxi Cash ISA.

A Maxi ISA is either all Equity/Stocks and Shares, upto £7000. Or its split between Equity and Cash. The limit of £3000 per annum applies to Cash in the Maxi, too.

Unless you've seen a product offering a better Cash rate within their Maxi ISA than you get from your current Mini ISA, I can't see any point of changing types "for the sake of it" if you're only talking Cash - each tax year you get a FRESH £3000 allowance, so can add to the MINI, if you like. You don't NEED a Maxi to go above £3000 - (using multiple tax years deposits/interest, not in 1 tax year, of course.)

You cannot invest in more than 1 Cash ISA (whether two minis, or one mini and one cash component within maxi) in any one tax year - not even if its £1500 in each. If you've already used this years allowance, you'll have to wait until April for the new tax year.

You don't HAVE to close previous ISAs, unless there are specific terms on a particular product. You can choose to keep each mini/maxi ISA from each tax year, from different providers, if you want.

Of course, if you are moving for a better interest rate, you ideally want to find one that allows transfers-in, and ask the new provider to arrange a transfer of funds from the old one. NEVER close the old one yourself and get a cheque, as you'd lose that tax-free status on that money.

NS&I don't allow transfers-in, but at 5.80%, its such a good rate its worth having a second lot of paperwork.

dunstonh

You cannot change a MINI to a MAXI (or vice versa) in the same tax year. Once the tax year passes, the MINI/MAXI status ceases to mean anything of importance.

You dont get much coverage on providers that offer a MAXI ISA with a cash element because not many exist and those that do arent good value.

shaz77_2

Thanks for the responses.

I have been considering buying some shares this is why I was considering the Maxi cash ISA. The way I was thinking was to have an ISA with £3000 invested making interest and the remaining 4000 invested in stocks and shares. What are my best options, I don't mind waiting until April when the next tax year begins.

dunstonh

You dont go MAXI with what you want. You go MINI.

MINI cash ISA for 3k and MINI stocks and shares ISA with another provider for upto £4k.

You can do it now and use this years allowance or you can wait until next tax year and use next years. If you have it now, it makes sense to use this years allowance as that will be wasted if you dont.

shaz77_2

Thanks I'm pretty clear on that now.

Incidentally what way are the mini stocks and shares ISA's taxed considering I already have 3000 in a mini cash ISA?

Cannon_Fodder

So you don't actually want a "Maxi CASH ISA"....you want to do both Shares and Cash.....

If you set about finding a Maxi ISA, because you want to move into Shares, that also has a Cash component, I think you'll be limiting the Cash interest rate achievable. Best i can think of, off the top of my head is M&S at 5.25% but they only have 4 funds...not a very good spread of risk.

I would recommend you pick the Best Cash ISA - currently NS&I at 5.80%, though check again in April, though as said you can't transfer in.

Then, seperately, you can choose shares/funds for an Equity Mini ISA, through a discount broker to keep the fees down. Read up on MSE guides to buying shares/funds.

Trying to get the best of the 2 types in 1 place is likely to be a fruitless search.

cheerfulcat

shaz77 wrote:

Incidentally what way are the mini stocks and shares ISA's taxed considering I already have 3000 in a mini cash ISA?

Any dividend income is effectively taxed at 10% and interest on any cash balances is taxed at savings tax rate ( 20% ). The only thing tax free about S&S ISAs is capital gains, but that's still an advantage worth having.

The balance in your cash ISA will not affect your S&S ISA.

shaz77_2

Cannon Fodder

Thanks for that response. Just to clarify you suggest that I keep the mini cash ISA I have which is generating good interest and then get a seperate mini stock/shares ISA at a different location depending on where the best deal is.

Cannon_Fodder

Yes, that's right.

gzed

Hi

I will add to this post. Maybe I should create a new thread but hey I try it here first.

I have a mini cash ISA in which I put my £3000 per year. I recently (last july) open a mini Stock and Shares (£250 per month) (ISA investor Halifax). I chose a medium risk as I don't want to be losing any money.

So far I have invested £1750 and the value of my share is ~£1789. This would mean that my ISA invester is currently growing at a rate of ~6.5% per annum. that's pretty rubbish. I was lured with ~9-15% when I signed. Has anybody got some ideas on the current values of ISAs? Thanks