How do i pay into my isa

patrickbateman

Hi, I have invested £3K in a Birmingham Midshires 5 year fixed rate ISA. I opened it in June and it paid interest at 5%.
This ISA has now been pulled but I now want to invest the remaining £2K of this years allowance.
I'm told that I can only open 1 ISA each tax year, and the one I have is now closed.
How do I procede?

financial_illiterate

I'm not sure you can proceed, other than waiting until April and opening a new one.

opinions4u

Always read the T&Cs.

BM usually have these very clearly displayed on the product page of the web site.

The current 5 year FRISA T&Cs can be found here.

3 DEPOSITS AND WITHDRAWALS
3.1 You can pay all or part of your yearly cash ISA allowance into your Account until we stop selling it.

Pretty clear. You've missed your chance for this year's allowance.

david78

You can invest up to the remaining £7,680 of your ISA allowance in a stocks and shares ISA. That's all you can do, or wait until next year.

patrickbateman

Thanks for the replies chaps. Thats pretty annoying since the ISA was closed within days of my opening cheque being sent to them.
I understand the account conditions, though my interpretation upon opening was that I would be able to utilise the remaining cash allowance with the same organisation if the version I opened was closed.
I think I will call them up to confirm.

financial_illiterate

If BM have any current ISA offers open then you might be able to squeeze the rest of your allowance under the one 'wrapper' but that is up to them.

Good luck!

MoneySaverLog

You can still transfer the £3k into another cash ISA and pay the rest into that. Though you wont get 5% anymore.

opinions4u

MoneySaverLog wrote: »

You can still transfer the £3k into another cash ISA and pay the rest into that. Though you wont get 5% anymore.

I think there's a 365 day interest penalty too!

Lokolo

Sometimes the provider will allow you to open another ISA with them and use the rest of your allowance there. But not all will. You should ring and check.

patrickbateman

Well I rang up Birmingham Midshires and they wouldnt allow me to pay into a different ISA with them. I quoted there terms and conditions and the girl on the phone admitted that it wasnt totally clear.
I cannot believe that some institutions will allow you to pay into a different ISA account but others won't. Surely the rules should be cut and dry. I may contact the Financial Ombudsman to challenge that.

Transferring to a new ISA isnt really an option because the interest penalty will reduce the sum to lower than I invested.

I'm normally pretty money savvy, and hold my hands up when I make a mistake, but this all feels slightly mismanaged to me. Surely if the Government issue me as an individual an allowance, then I should be able to utilise it and not lose out because a bank closes an account. I understand this won't affect the majority of customers, but it is a weakness in ISA regulations.

opinions4u

Surely the rules should be cut and dry.

The rules do not compel an organisation to offer multiple cash ISAs to the same customer in the same tax year. Managing across multiple ISAs adds expense to the individual provider's operations. As such most choose to say you can only have one cash ISA per cash year.

I may contact the Financial Ombudsman to challenge that.

The best you will get them to do is to rule that the T&Cs are unclear. They won't force the provider to take an additional deposit.