Silly question about ISA from a newbie...

Miss_Ratty

Hi All,

I'm not new to MSE, but I am new to the world of savings - having been declared bankrupt 3.5 years ago. I applied for an ISA in October as my IPA payments were ending and I wanted a decent vehicle for saving, but never heard anything from Halifax to say the application had been successful. I called them a few weeks ago and they confirmed that it had been opened, and would resend my documentation.

Well, I opened the account due to the good rate of interest at the time (about 2.9/3% I think) and the fact that my bankruptcy wouldn't affect my chances of getting it as a number of ISA accounts will require credit checks (silly if you ask me!).

We're now nearly at February though, and I wondered if the interest rate still applied for the next financial year or whether I'd be better opening a new ISA in April? It may sound really silly, but I have no idea how they work really, so please be kind! I have a small amount of savings now - is there any merit in putting these into the ISA even though it's nearing the end of the year?

Thanks so much in advance... x

Gigglepig

I think it depends on the terms of the savings account you opened - many will have a certain interest rate for a set time period and then drop

If you put money into the ISA this year you can still use the rest of your 2011/2012 allowance, whilst after April you will be using up the 2012/2013 allowance. There is more info about how ISAs work elsewhere on this website.

Whether or not you should put the savings in and ISA at the moment may depend on whether you are better off earning a bit of interest or whether you have any debts you should pay off first.

Miss_Ratty

Thank you so much. It was a Halifax Direct Reward ISA - at 3%. I have no debts as I was declared bankrupt about three years ago and my IPA is about to end, and I want to start being sensible and put money aside from now on!

vindicated

A large proportion tend to drop the ISA rates after the tax year and have a new "Issue" released, I've opened a new ISA every year as my bank drop them, BoS years ago, then Alliance & Leicester and then Santander so I would keep a close eye and check before crediting in the new financial year.

If they do, then open a new one elsewhere as you can transfer in an exisitng balance whilst retaining your new allowance

Miss_Ratty

Thanks so much. I will check and keep my eye oped for others!!! :-)