Open two ISAs? One for transfers one for new money?

kev225

Probably a daft question as I know you're only allowed to pay into one ISA a year, but I'm unsure as to whether a transfer counts as paying in. I'd be grateful for some MSE wisdom regarding the following.

What I'm contemplating is:

Open a Santander 2 year fix @ 4%, transfer in last years ISA.

Open a Santander easy access @ 3.3%, pay in this years money as I save.

Is this possible?

innovate

Yes it is possible.

Transfers do not count as new money.
Only new money counts towards your annual allowance.

Do not pay anything into the 4% one - just use the transfer form to fund it.

You might find better than 3.3% elsewhere for paying into your 2012-2013 ISA, e.g. Nationwide 4.25% (though that has a few pre-reqs which you might not like). Couple of others, too.

Poster_girl

kev225 wrote: »

Open a Santander easy access @ 3.3%, pay in this years money as I save.

If you are going to be paying a monthly amount into your ISA, why not consider Nottingham BS's starter ISA @ 5% which lets you pay up to £470 per month.

Or alternatively (if you are not a HR tax payer), one of the higher paying regular savers (First Direct @ 8%/HSBC @ 6% though both require current accounts with them) and opening an ISA when you have saved up the full allowance thus maximising interest earned.

innovate

You are absolutely right, Poster Girl - - I keep forgetting that people might want to contribute monthly rather than in an upfront lump sum. Sorry