Isa/esavings advise needed!!

annette_tr9

We have some money in an e-savings account at the moment which will incur interest on 31st March.

Is it a good idea to transfer money into an isa after 31st march to get the interest on that?? I have already got £500 in an isa with my bank so i can put another £2500 into that i assume?? Also my partner can have £3000 in his. are we only allowed one each? If I took the money back out of the Isa after we had the interest and put it back into the e-savings account would i loose any money?

Any help would be appreciated, i have no idea about these things!

carnet

Each individual is allowed to have one ISA every year, either a Maxi or Mini.

I think the current NW rates are 5% gross/4% net on their eSavings A/c and 4.85% tax free on their Instant Cash Isa.

You only receive interest for the length of time you've actually had the money in the account so I don't really understand your query.

Kazza242

Is it a good idea to transfer money into an isa after 31st march to get the interest on that??

Interest is calculated daily, so transferring money across to your ISA at the end of the tax year will not give you one years' worth of interest. However it is a good idea to use as much of your £3000 isa allowance as you can by April 5.

I have already got £500 in an isa with my bank so i can put another £2500 into that i assume??

If you've already contributed £500 to your isa this tax year, then you can add another £2500 to the isa account by April 5. You must hurry though!

Also my partner can have £3000 in his. are we only allowed one each?

If your partner has not opened a mini cash isa this tax year, then he can open one and contribute up to £3000 by April 5 and then another £3000 from April 6. You will get another £3000 allowance on April 6.

If I took the money back out of the Isa after we had the interest and put it back into the e-savings account would i loose any money?

This is not a good idea! Taking money out of an ISA when you don't need to doesn't make sense. Once you withdraw money from your ISA you cannot add it back to the ISA that tax year. For example, if you had £3000 in your isa and you withdrew £500, you would not be able to put the £500 back in that tax year.

Also, withdrawing money from your tax-free isa account and putting it into an account that is subject to tax would be foolish. The tax man would take a 20% cut of your interest (if you're a basic rate taxpayer) or 40% for higher-rate tax payers. Keep as much of your interest shielded from the taxman as you can .

lipidicman

Kazza242 wrote:

Interest is calculated daily, so transferring money across to your ISA at the end of the tax year will not give you one years' worth of interest.

I've seen a couple of posts asking about this recently. Very worrying indeed but imagine how much money you could make if it was the case!

annette_tr9

excellent, that answers my question!!! Thanks everyone!