ISA question

Ash1982

Hi,

I have a 11/12 ISA £5366 (with interest) with northern rock (virgin money) at 3.05% clean rate (variable on 60 days notice) and I've found a regular saver ISA 12/13 from Nottingham BS at 5% but it doesnt accept transfers. If I open the BS ISA and start paying in £470 a month and virgin money reduce my rate on the 11/12 ISA later, can I still transfer the 11/12 to a new provider to get a better rate or will I be stuck with the 11/12 ISA at a lower rate until 13/14 as I have already opened an ISA with BS for 12/13 that doesnt accept transfers?!

Hope this makes sense to somebody!

Ash

Mikeyorks

Yes it makes sense - and yes, you can do that.

Regular savers aren't likely to accept transfers in. Hence the attractive rate - as you're strictly limited as to what you can put in.

Ash1982

Thanks Mike,

That is good news. Just one last question, I have a S&S ISA with HL, as long as I dont go over £5,640 in new investment in this in 12/13, I am still ok to fill the regular saving ISA with another £5,640 arent I? i.e. you can hold and invest/save in seperate cash and S&S ISAs in any give year.

Mikeyorks

Affirmative - to every part of that. If you choose wisely within HL - you'll regret the cash rate!

Having said that ..... very essential to keep a cash balance outside of investments. I only ever use the full S&S allowance these days, ever since interest rates bottomed. But just re-circulate a number of years old cash ISA deposits through fixed rates - in order to keep an element in cash.

Ash1982

Thanks Mike, its an interesting point you ellude to though. Does the cash held 'pending' investment in a HL S&S ISA constitute a cash ISA or element of the cash limit?! I wondered that when I opened it a few months ago.

p.s. I know, I think HL pay 0.05% or something silly on cash held pending investment but thye have recently launched a 'competitive' 2% cash ISA!

psychic_teabag

No, uninvested cash in a S&S ISA is just that. It doesn't count towards cash ISA limit. (I think any interest it earns is actually taxed - well, tax is deducted, but it doesn't count as taxable income.)