General ISA question

Ian68

Hi

When opening a cash ISA for the first time, how much can you deposit initially? I understand you can only deposit £53** odd a year but i was reading the Nationwide site about there's and it 'sounds' as if you can deposit an initial big lump sum - 25K is mentioned. Could someone clarify this please?

Many thanks

Ian

blueberrypie

If the funds are coming from another ISA - i.e. they are already within an ISA wrapper - you can *transfer* (not withdraw and deposit!) as much as you want.

If the funds are "new" - i.e. not coming from another ISA, then you are limited to whatever the ISA allowance is for the current tax year (£5340 in 2011/12).

Ian68

blueberrypie wrote: »

If the funds are coming from another ISA - i.e. they are already within an ISA wrapper - you can *transfer* (not withdraw and deposit!) as much as you want.

If the funds are "new" - i.e. not coming from another ISA, then you are limited to whatever the ISA allowance is for the current tax year (£5340 in 2011/12).

Thank you.

And is that the 'law' with no exceptions?

So if I had a lump sum of say 30k, can I open only 1 ISA? If so, where could I put the rest to earn 'decent' interest?

Cheers

Ian

blueberrypie

Yes, that is the law, with no exceptions.

You do have a couple of options, although none of them will allow you to invest £30 in ISAs soon. You could use your 2011/12 allowance of £5340 now, and on April 6th (when the new tax year starts), put a further £5640 into an ISA - the same one or another one.

Or you could put some of your funds into a stocks and shares ISA, if that's a suitable option for you. Your "full" ISA allowance for 11/12 is £10680, and you can put up to half of this into a cash ISA, with the rest into a S&S ISA. Again, once April 6th arrives, you will have your 12/13 allowance to use.

But I'm afraid there's no way to invest more than the current year's allowance - that's why you so often hear the mantra "use it or lose it" applied to your ISA allowance.

Healthking

Hi there, I've just received my redundancy money and want to use it to make me money toward my retirement. If I use some to open a cash ISA this financial year can I then transfer it into a new one next financial year or would I not gain anything by doing this?

Thanks

Lokolo

Healthking wrote: »

Hi there, I've just received my redundancy money and want to use it to make me money toward my retirement. If I use some to open a cash ISA this financial year can I then transfer it into a new one next financial year or would I not gain anything by doing this?

Thanks

Why would you want to transfer it to one next year? You can deposit ~£5k (£5340 this year, cannot remember how much next) each year, so you open one today, deposit £5340. On April 6th - new tax year - you can deposit a further £5xxx (new limit, cannot remember), so you will now have over £10k in ISAs.

The only reason you'd transfer it is if there was another ISA with a better rate.

Healthking

Hi Again - Can my wife and I each open a cash ISA individually?

Thanks again

blueberrypie

Healthking wrote: »

Hi Again - Can my wife and I each open a cash ISA individually?

Thanks again

Yes. They are Individual Savings Accounts - you can only hold one in your own name (i.e. no joint accounts). You can certainly open one in your own name and also give your wife some money to open one in her name. Bear in mind though that it will then legally be her money, which might have consequences if she were to die, or you were to separate, or she just decided to go on a spending spree with it.