Going From Natwest Isa to Santander

psychic_teabag

innovate wrote: »

Example:

• you have £5,000 in an "old" ISA (that is one you paid into before 6/4/2012)
• you can open a new ISA for the current tax year (as you have already done at Santander)
• you can fill in Santander's ISA transfer form for your £5,000 (or parts of it). Do not move the money yourself
• you can pay up to £5,640 into that same Santander ISA between now and 5/4/2013

Or you can pay £5640 into any other (one) cash ISA between now and 5/4/2013. It doesn't have to be the same ISA. (And in fact, because you want to transfer to a fixed-term ISA, you won't be able to add any more it - not because of ISA rules but because of the account T&C.)

Big_Adam_2050

@innovate, ah okay. I'm starting to understand this a bit better now.

So, could I then;
Transfer my £5000 to the Santander ISA but still continue using my NatWest one as my account I put money in so I don't spend it (I have a bad habit of spending my money if I go to a cash machine and see I have a large lump sum). Or will I have to leave the NatWest one alone (no pay in or out till next year)?

innovate

psychic_teabag wrote: »

Or you can pay £5640 into any other (one) cash ISA between now and 5/4/2013. It doesn't have to be the same ISA. (And in fact, because you want to transfer to a fixed-term ISA, you won't be able to add any more it - not because of ISA rules but because of the account T&C.)

ah, good points, psychic! sorry, I should have read a bit more about what sort of ISA Big_Adam already opened, doh!

psychic_teabag

Yes, you can continue to use the Natwest one as your "day to day" ISA.

What you might want to do is open an esavings account, or something, and use that to hide money from yourself in the short term, and then move from there to the ISA in larger chunks when you have some confidence that you won't need to withdraw it again. That avoids burning up your allowance due to lots of little deposits and withdrawals.

Note: you talk about transferring £5000. Is it just a coincidence that that's (roughly) the annual allowance. You can transfer £6000, £7000, as much as you want, since transfers are completely unrelated to the annual allowance.

innovate

Big_Adam, can you pls answer these questions (should help me confusing the issue even more than I did already)

1. what exactly is the name of the Santander ISA you opened / what interest rate is it
2. have you paid any money into any ISA since 6/4/2012?

Big_Adam_2050

innovate wrote: »

Big_Adam, can you pls answer these questions (should help me confusing the issue even more than I did already)

1. what exactly is the name of the Santander ISA you opened / what interest rate is it
2. have you paid any money into any ISA since 6/4/2012?

1a) Santander - It is a FIXED RATE ISA with a rate of 3.50% AER.
1b) Natwest - Cash ISA.

2) I have paid no money into either of my ISA (Natwest or Santander) since 6/4/2012 (or way before, my money just sits in the NatWest (unless interest is counted, the NatWest one gets interest month of about £3.50) one).

@Psychic Teabag, the £5000 is the amount I'd be confident to lock up for a year.

Edit

Also sorry for being difficult and a bit dim.

innovate

OK, ta, difficult and a bit dim (your words, lol) Big_Adam
Don't you worry, we all started out not knowing jack s!!t about all this ISA stuff

Suggest you could:

1. get Santander to transfer all your Natwest ISA money - - - no point keeping anything in that account because it pays measly interest
2. do not pay any new money into that Santander ISA - just leave it to earn interest
3. as psychic suggests, for regular deposits and withdrawals, a savings account might be better than an ISA. Santander have a decent e-saver - - - or may be you could benefit from their 1-2-3 current account? It does cost £2/month but you could probably get this back, and make some money on top of it, from their cashback offer. I have to say though, they get a lot of flack for being incompetent, so you might not want to go all the way with them
4. for your tax-free savings up to £5,640 in 2012-2013, open another ISA somewhere - - one that allows you to deposit odds and sodds all year. Check this thread for the best deals.

Hope this makes sense

Big_Adam_2050

All sounds good so far, so let be sure I got this all straight.

1) Transferring from one ISA to another is "free", but paying in (say cash, cheque) or withdrawing (ignoring any penalties) both come out of my allowance for the tax year.

2) I can keep my NatWest ISA as well as my Santander one, as long as I don't go over my £5000 allowance for the year (just wondering, what happens if you do?).

3) Should I check that transfers are okay on the Santander ISA (don't want to send off all the details and have my money vanish into the aether)?

4) I need to research stuff much better than I currently do.

psychic_teabag

OP doesn't want to fix all the ISA money, only £5k. (£3.50 per month at 0.5% means around £8400 in total at a guess).

Could transfer £5k to the fixed-term account and the rest to another instant-access ISA somewhere else. (Santander also do a decent instant-access ISA. The minimum opening balance is £2500, though you don't have to keep that minimum after opening.) Might be a little complicated to run both transfers concurrently, so perhaps wait until the transfer to the fixed-term one is out of the way before taking additional steps.

psychic_teabag

Big_Adam_2050 wrote: »

All sounds good so far, so let be sure I got this all straight.

1) Transferring from one ISA to another is "free", but paying in (say cash, cheque) or withdrawing (ignoring any penalties) both come out of my allowance for the tax year.

withdrawals don't come out of the allowance, but they don't replenish it. So if you deposit £2k, that's £2k of allowance used. If you withdraw £2k, that doesn't "cancel out" the deposit, so that's till £2k of the allowance used.

2) I can keep my NatWest ISA as well as my Santander one, as long as I don't go over my £5000 allowance for the year

Yes. And as long as you add new money to only one of them. (But since Santander one is fixed-term, you won't be able to add money to it anyway.)

(just wondering, what happens if you do?).

Natwest might police it for you, and prevent you doing so. Or they might not. At worst the excess would (eventually) be taken back out of the ISA and you'd get a letter from the taxman telling you not to do it again. I don't think there are penalties for a first offense. But they might be cross if you keep doing it.

3) Should I check that transfers are okay on the Santander ISA (don't want to send off all the details and have my money vanish into the aether)?

Some would say that's always a risk when dealing with Santander - they have a bit of a reputation for screwing things up !