Can I open then transfer new ISA?

matty_hunt

Hi. Could someone please clarify for me, thanks.

I want to open a two year fixed ISA with Natwest @3.9% for transfering my existing ISA from 09/10. This is a special rate for transfered ISAs only, usually they pay 3.5%.

My question is, can I open a variable rate cash ISA with someone else for this tax year then transfer it over to Natwest before their 29th March deadline even though the new Isa will be less than a month old and still in the same tax year.

Many thanks.

psychic_teabag

Yes, it sounds like that ought to be possible. You're allowed to transfer the current year's ISA account (in full). Note that you have to watch NatWest - they have a habit of offering accounts where the advertised rate doesn't start for a while, and giving a lower rate until then. But then they withdraw the offer so that those who wait until closer to the real starting date lose out.

Web page suggests you have to apply before 29th Feb but the account does not start until 4th April. That said, since it's a transfer, maybe you can specify on the transfer form that they mustn't take the money until, say, the middle of March. (But you do need to give them time to actually get the money by the start date.)

Linton

If you read the T&Cs for the Nat West fixed rate ISA they say you can apply during February and that the deal may be withdrawn at any time. So if you wait until the end of March it looks like you will probably find the option closed.

Other that that I cant see any reason in principle why you cant do what you want, though it would be prudent to check with Nat West whether its OK. If you werent aware - the important thing is that you make sure its a proper ISA transfer from the existing ISA , which Nat West will organise. You dont withdraw your money from your existing ISA and pay it into Nat West. If you transfer the cash yourself, it will lose its separate 2009/2010 status.

xylophone

If the variable rate ISA is instant access I don't see why not.
http://www.thisismoney.co.uk/money/saving/article-2098279/NatWest-AGAIN-catch-humbles-returns-best-buy-Isas.html re catch with the Natwest Account.

matty_hunt

Thanks for the info. I was aware of the delayed start and low rate for the Natwest ISA product but had not realised what this equated to until reading the article provided in the link above, thanks Xylophone. On reflection I think I would like to avoid Natwest. Their policy does seem a little sneaky. Thing is, Ive already applied for the account. Now Ive not sent any money, infact Im still waiting for the confirmation paperwork. As long as I dont deposit any money or transfer my old ISA, can I just ignore it and open another ISA with a different provider or is that it, Im stuck with Natwest for two years?
Thanks

Gromitt

You can open as many ISA accounts as you like. Its only when you "subscribe" (pay money) into one of them your bound.

If you opened it online, you can also cancel it within 14 days of opening regardless of whether or not you paid funds into it.

matty_hunt

Gromitt wrote: »

You can open as many ISA accounts as you like. Its only when you "subscribe" (pay money) into one of them your bound.

If you opened it online, you can also cancel it within 14 days of opening regardless of whether or not you paid funds into it.

Thanks. Thats good to know.