I can never get my head around ISAs!!!

martin2345uk

I seem to forget how it works every flippin year! :mad: I'm so dense!

OK so currently I have £11k in a Halifax ISA from this tax year 2011/2012. I maxed out during the year so I also have £2k in a normal savings account (starting putting monthly savings in there once the ISA got maxed).

2 questions:

1. Is the sensible thing to do now open a new ISA for 2012/2013, transfer the £11k in from the Halifax ISA, then pay in the £2k as well, then just keep putting my monthly savings in there until I hit the £5340 (or however much it will be in 2012/2013)?

2. If the answer to 1 is "yes", can I open this new ISA now or must I wait till after 6th April? I ask because I just speculatively looked at the M&S one on their site and it only talks about 2011/2012 rates/info - wouldn't the 2012/2013 one have possible different rates? And would I therefore not get them if I opened it now?

Phew... sorry about this, I realise these might seem dumbass questions but I genuinely find ISAs confusing and scary!

Thank you for your time! :j

MoneySaverLog

nothing stopping you transferring the money from one isa to another. My fixed rate ISA with lloyds will allow transfers in which i've done but also maxed out this year. Then next year I can continue paying into it until I've subscribed a further £5,640 (next years allowance) and then again I can put in a further allowance in the year 2013/14 all at the same fixed rate.

Different providers have different rules for this though.

innovate

martin2345uk wrote: »

.....2. If the answer to 1 is "yes", can I open this new ISA now or must I wait till after 6th April? I ask because I just speculatively looked at the M&S one on their site and it only talks about 2011/2012 rates/info - wouldn't the 2012/2013 one have possible different rates? And would I therefore not get them if I opened it now?

The answer to 1 in in theory 'yes' (assuming you intend to keep your accumulated ISA amounts, and want to save more into an ISA - - most likely a perfectly sensible thing to do).

Whether you find a new ISA provider (who you ask to transfer your existing ISA) now, or in the new tax year, or some other time, depends entirely on the existing ISA arrangements you have. If your existing ISA has matured and your interest rate is worse than you can get in another ISA, open a new one, after you have shopped for the best one for you, and get them to transfer your funds. Assuming they do allow transfers, of course.

Whether you can pay your next year's tax allowance into the same ISA depends again on the ISA, and on your ability to make deposits into it - - some providers let you pay into it all year(s), others only allow one deposit.

You'll just have to read up about the various offers and decide which one is right for you. Don't be put off by the need to compare the various offers against your requirements. There are plenty of sites (such as this one) which help you to get a quick overview on what's on offer, and with what terms.

mbailey

My understanding of the Sandander fixed rate accounts is that you can only pay money in during the initial 14 days when opening the account (as well as a small window from 6th April for 2012/13 new money).

Cypherite

mbailey wrote: »

My understanding of the Sandander fixed rate accounts is that you can only pay money in during the initial 14 days when opening the account (as well as a small window from 6th April for 2012/13 new money).

That is correct.

blueberrypie

martin2345uk wrote: »

1. Is the sensible thing to do now open a new ISA for 2012/2013, transfer the £11k in from the Halifax ISA, then pay in the £2k as well, then just keep putting my monthly savings in there until I hit the £5340 (or however much it will be in 2012/2013)?

2. If the answer to 1 is "yes", can I open this new ISA now or must I wait till after 6th April? I ask because I just speculatively looked at the M&S one on their site and it only talks about 2011/2012 rates/info - wouldn't the 2012/2013 one have possible different rates? And would I therefore not get them if I opened it now?

1. You're nearly there. The sensible thing to do would be to find the best-paying suitable ISA for your 12/13 funds, and put your 12/13 funds into that. If that ISA accepts transfers in, transfer your £11k in too. If it doesn't accept transfers in, find the best-paying suitable ISA that *does* accept transfers-in, and transfer your £11k to that. You'll have two ISAs running, but that's okay - the "one cash ISA" rule only applies to putting in new money.

2. The rates don't necessarily change just because the tax year does. However you are right that if you opened an ISA today but did not fund it for several weeks, the rate you wanted might not be available at the time you funded it, and depending on the t&c of the account, that might mean you ended up with a lower rate. However you can check that before putting any money into it, and if the rate was no longer available, you could put your 12/13 allowance elsewhere. As you would not have *subscribed* (i.e. put new money in) to that ISA, there would be nothing to stop you from doing that.