Cash ISA - Complete novice !

bandofbrothers

Hi.

I am going to put a little money to one side.

I'm going to open a cash e isa with my bank which is HSBC.

However after looking at the mountain of literature online I remain a little confused.

I know I can start the isa from £1 to £5k'ish.

I then think I have to put at least £10 a month into this isa which I believe can be done by Internet transfer from my current account although I'm hoping I can set something up to transfer a set amount each month ?

I know I can access the money from the isa when I want without fees and interest is paid monthly.

My novice questions are :

Is their any annual fees.

If I don't manage to put in the full £5k in the financial year then what happens ?

I know I can just leave the cash in it but can I still add money to it when I want ?

I'm not able to invest thousands but it pays better interest than my savings account.

Any further advice would be appreciated.

MoneySaverLog

If you have a instant access isa you can add up to your allowance at anytime thoughout the year. Some fixed rate isa's like the one from Lloyds TSB at the moment will allow you to add to it. Other fixed rate accounts only accept a single deposit. Or deposits until the issue is withdrawn.

There are no annual fees with a cash isa. If you don't put in the full years allowance nothing will happen, you'll just not be able to make it up at a later date in a new tax year.

I think there are better cash isa's out there than HSBC in terms of rates though.

innovate

Read the MSE Full ISA Guide, then com back with your remaining questions

bandofbrothers

So if I open an isa now do I only have until 5th of April 2012 to add funds into it ?

It's an instant access isa.

MoneySaverLog

Depends on the ISA and its terms and conditions and whether it is still available. You'll have to ask the provider.

bandofbrothers

Say for example I only manage to put £1500 by 5th of April in the isa I've just opened will I then be able to open a new isa from 5/4/12 and the money just sits in this newly opened isa earning interest with the inability to add more money into it.

MoneySaverLog

You'll be able to open up a new cash ISA from the 6th April and put in upto £5,640. Or if your ISA allows continue saving into your existing ISA with your new allowance. Come next tax year what you've paid in this year cannot be added to, so you should either use this years allowance by 5th April or lose it.

bandofbrothers

Thank you so much for your advice.

I now have a better angle on this.

ejv

bandofbrothers wrote: »

Say for example I only manage to put £1500 by 5th of April in the isa I've just opened will I then be able to open a new isa from 5/4/12 and the money just sits in this newly opened isa earning interest with the inability to add more money into it.

The £1500 will be considered your ISA for this F yr(2011-2012).Your chance to put any money into this F yr's ISA ceases(forever) on 5/4/12.

From 6/4/12 whatever you remit would be for F yr 2012-2013.You can add upto the maximum allowance(I think its £5650) till 5/4/13.

There would be far better ISA deals than HSBC in the market. Check this site as well as "moneysupermarket" (The Natwest 3 yr fixed 4.2% for ISA transfers was not listed in MSE!!!)

innovate

ejv wrote: »

(The Natwest 3 yr fixed 4.2% for ISA transfers was not listed in MSE!!!)

It was - together with the "health warning" that it isn't actually 4.2%.