End of 06/07 Financial Year Mini Cash ISA Discussion Area

obsessed_saver

Hmm. Interesting the Scarborough BS one. Will have to keep that in mind come April.

Abetorius

Hi,

I'm confused by all the information here and have several questions on minicash ISA's. I hope someone can help me out.

I would like to save some money and from what I've read Martin suggests that a minicash ISA would be the best way to save my first £3k (altho I'm not sure I can save that much atm). I have no savings at this time having just spent all of them over the last 8 months.

I understand that each year you get a £3k limit in cash to invest, that each year you can open a new miniISA and the specifics on saving in them (with regards to not being able to return money taken/no reset of limit on withdrawal); my questions here are:

a) Can you opt to keep the existing ISA and up it from £3k to £6k? (assuming that it is still the "best buy")

b) If the answer to A is no, then what happens to the money in the first years ISA? (does it remain and keep gaining interest? does it get returned to my current account?)

c) ISA's marked as "no transfer" does this only apply to opening it and not being able to transfer into it from an existing ISA or does it do exactly what it says on the tin and remove all transfer options?

d) If I can't save £3k before the end of the tax year but can invest more into it next year (assuming it stays active, see question b) can I keep adding to it up to the £3k (assuming that the answer to a was no) or is it frozen at the balance at the end of the year, requiring me to transfer it to a new ISA to keep investing on that ammount (I understand that I could just open a new one and start all over but the chances are I would get a better buy).
Also does the previous years savings affect my allowance for the new year, i.e. I manage to save £1k before the end of the tax year and it stays in that ISA so I can save another £2k in total.

I've looked through the various articles and posts on the subject but am still confused, hope someone can help me out here.
Is there a specific place that I can post my situation and get advice from the community on it (I also understand that it is at my own risk to act on this advice as none of it is official). I am in an incredibly low paid job and a lot of the decent savings seem to require a large input up front or a regular input and I just can't commit to that until I get a better paid job.

Thanks again for any help.

isasmurf

Hi Abetorius
You have a ISA wrapper into which you can put up to £3,000 each year on top of any existing balance in the ISA. Once you put money into a particular ISA you can only put any of your remaining allowance for that year in to that ISA, unless you transfer the moeny you've put in that year to another provider.

Wen you open an ISA that application remains valid for each tax year until you go through a full tax year without putting any money into the ISA. If you do go through a full tax year without adding to your ISA then you will need to submit a fresh application before you can add any more to it.

Any money put into an ISA remains there earning tax free interest until you withdraw it.


ISAs marked "no transfers" mean that it will not accept transfers from other ISAs. They will still allow transfers to another ISA, as all ISAs must allow this. They may however, charge a fee or penalty (through x days loss if interest) to do this. These charges mainly operate on fixed term ISAs.

I hope that answers your questions.

Abetorius

Thank you for your reply, I think that answers my questions perfectly.
Now to look for a decent mcISA I can afford to save in, altho I'm probably going to miss this years allowance entirely.

stphnstevey

JohnnyBoy wrote:

I'd like to draw your attention to Scarborough Building Society's Regular Savings ISA, which is paying 6.3%AER. You can pay in from £10 to £250 per month plus you can make one withdrawal per year and still get this great rate.
If like me you are only able to save a little every month this might be the account for you, if you want to keep your current account where it is.

For details see http://www.scarboroughbs.co.uk/savingsandinvestments/products/my_savings.html

Hope this helps?

Bear in mind this is a RS, so the actually yearly rate would work out lower

obsessed_saver

stphnstevey wrote:

Bear in mind this is a RS, so the actually yearly rate would work out lower

But bear in mind it will only be "lower" if you have £3000 at the beginning of the tax year to put away. If you are building up the saving over the year, then the higher rate of a Regular Saver account will still be better than a lower rate non-RS type account.

stphnstevey

obsessed_saver wrote:

But bear in mind it will only be "lower" if you have £3000 at the beginning of the tax year to put away.If you are building up the saving over the year, then the higher rate of a Regular Saver account will still be better than a lower rate non-RS type account.

NO

Depends on the rate of the RS ISA and the rate of the 'normal' ISA

In this case the RS is 6.3%, which if you contribute £250 per month for 1 year, the interest will be £102.38. Taking into account the interest on your money whilst drip feeding from a high interest savings account into this ISA, say at 5.75%, interest after tax would be £74.50. Total of £176.88

If you open the top 5.8% ISA, your interest would be £174 on £3000

So pretty similar really

beefturnmail

Hi, I have a query with the Scarborough ISA. The max you can invest each month is £250, so to get the full £3k, I would need to invest the full £250 each month. If for example I can't afford to put in £250 one month, and only put in £200, so that my total amount I put into it over the year is £2950, can I invest my remaining £50 at the end of the year in another ISA with a different provider? Or does this break some ridiculous rule?

stphnstevey

Sounds ok - just as long as you don't exceed your £3K in any one tax year

Kazza242

beefturnmail wrote:

Hi, I have a query with the Scarborough ISA. The max you can invest each month is £250, so to get the full £3k, I would need to invest the full £250 each month. If for example I can't afford to put in £250 one month, and only put in £200, so that my total amount I put into it over the year is £2950, can I invest my remaining £50 at the end of the year in another ISA with a different provider? Or does this break some ridiculous rule?

If you're contributing to an isa you cannot then pay into another isa in the same tax year.

For example, open an isa with Scarborough, contribute to it up to £2950 during the 2007/08 tax year and then pay the remaining £50 isa allowance into a isa held by another institution in the same tax year. This isn't allowed.

Scarborough do allow you to make more than one payment per month provided the total per calendar month doesn't exceed £250. So if you had £200 available at the start of the month you could deposit this in your ISA and then add an additional £50 later that month.