Very basic question

Grandad99

Living on a modest pension investments have never featured in my budget. However having managed to accumulate 6k I want to keep it reasonably easily available using a 2 year cash ISA.

If I put the maximum in before 5th April do I have to take out another ISA next year for the balance?

I said it was very basic but I haven't found a website that covers it. (Perhaps my internet knowledge matches my financial expertise!)

mw2655

hi if you put the max in now, you can usually just top up next tax year into the same account.

mw2655

grandad99

hang on a minute, just noticed you're talking about a 2 yr fixed cash isa, you may not be abe to top up next tax yr and may indeed have to open another isa account..

best read the small print terms and conditions.

McKneff

mw2655 wrote: »

grandad99

hang on a minute, just noticed you're talking about a 2 yr fixed cash isa, you may not be abe to top up next tax yr and may indeed have to open another isa account..

best read the small print terms and conditions.

The interest rate on your 2 year fixed will probably plummet so you will have to find a good rate ISA and transfer that into it.

Make sure the accept transfers in.

pqrdef

Locking your money away for 2 years is a dangerous idea if you don't have any other savings or resources for emergencies.

Ifts

If I read your post correctly then I take it you have £6K that you want to put in to a 2 yr fixed rate ISA.

If you take a 2 year fixed rate ISA out before 5th April - ask the provider if you can also add next years ISA allowance to it.

Or you may want to put this years ISA allowance in to an easy access ISA before 5th April, then transfer the contents and any extra you want to add to it to a 2 yr fixed rate ISA after 6th April (providing the fixed term one allows transfers in).

*do take note what pqrdef said in their post about locking the money away for 2 years, only do it if you are sure that you will not need access to it (as some providers do not allow access during the fixed term)*

psychic_teabag

Fixed-term ISAs do seem to generally allow early access, though with a penalty. Non-ISA fixed-term accounts generally don't.

It doesn't affect the interest you receive if you have two separate 2-year fixed accounts (at the same rate) or a single account. So if you can be bothered trying to use one of the suggested approaches to have a single account with £6k, go ahead, but it might be simpler to just go with one account for your 2011/12 allowance and a second account for the remainder which will come from your 2012/13 allowance.

Note that if you open a fixed-term ISA account with £500, you will not be able to use the rest of your ISA allowance for that year : the account will probably not accept any more money, and you cannot subscribe to another ISA in the same year. If you think you might have more savings before the end of 2012/13 it might be worth opening an instant-access ISA for the remaining £500 after April 5th, so you can add more to it later. You could later transfer it to a fixed-term account if/when you choose.