Mini-isa advice

timbo82

I'm currently consolidating my money and closing down my bank accounts that don't have much money in them. As part of this I plan on closing my mini-cash isa with the West Brom that has about £100 in it.

Would I be best to wait until April before closing it or will it make no difference in terms of interest earned. I don't expect that there will be much interest but I may as well hold on and have it myself rather than letting the bank keep it if possible.

As you can probably tell I haven't got a clue about any of this. Any gentle advice to point me in the right direction would be great!

Cannon_Fodder

Interest should be calculated daily and added on a pro rata basis on closure.

So, I guess it depends if where you will put it then, will be earning you more than where it is now...if it isn't I guess you wouldn't be moving it?

If you have contributed to the ISA during this tax year, you cannot put it into another ISA in this same tax year, so unless its rate is appalling its worth it sitting there, and being added to if possible, until you take out a new ISA and transfer across to it...

timbo82

Cannon_Fodder wrote:

Interest should be calculated daily and added on a pro rata basis on closure.

So, I guess it depends if where you will put it then, will be earning you more than where it is now...if it isn't I guess you wouldn't be moving it?

If you have contributed to the ISA during this tax year, you cannot put it into another ISA in this same tax year, so unless its rate is appalling its worth it sitting there, and being added to if possible, until you take out a new ISA and transfer across to it...

I'm moving the money for a few reasons. My main one is to have as an emergency fund (I'm an ex-student who is struggling to come to terms with grown-up banking). The other reason is because I now live in Northern Ireland and really that account is pretty useless to me. If it was a large investment earning a large amount of money for me I'd be inclined to leave it but at this stage in my life I could probably use it closer to hand. Even so, I don't want to move it if I'm going to lose a vast amount of interest - I'm happy to wait a few weeks if it will pay off.

Robert_Sterling

If you have £100 in the ISA it will earn about a fiver a year.
The fact that it is an ISA saves you about £1 a year in tax.
Closing it down is no big deal IMHO.

timbo82

Robert_Sterling wrote:

If you have £100 in the ISA it will earn about a fiver a year.
The fact that it is an ISA saves you about £1 a year in tax.
Closing it down is no big deal IMHO.

Thanks for the new perspective - I hadn't thought of it like that. I guess I'll have to take the commonsensical route and ask them, then take the money out if the interest is pro-rata. I know its only £5 but if I'm not going to get it if I close the account early I may as well hang on and claim it rather than giving it to the bank.

RayWolfe

Of course you will get it. As has been explained, you get interest pro-rata for the time the cash is in the account. If it's one day, you get one day's worth of interest, if 365 days you get the whole years interest.

gt94sss2

The other thing to remember is that - assuming you have a membership account - if the West Bromwich was to merge or float in the future you would lose out on any bonuses or free shares if you close your account..

Regards
Sunil

steady__eddie

Good point Sunil, I would be tempted to leave the a/c. open on the strength of that alone. As a matter of interest I attended a members forum at the West Brom last week and judging by the comments expressed by the board, I reckon that there's more chance that Ian Paisley will convert to catholocism before West Brom loses its mutual status. There again, I wonder how many people have been told that their position was unassailable only to find that their P45 was delivered shortly afterwards ?
Anyway, the meal more than made up for some of the mediocre rates which they offer.