Paying-In Time-Limit?

Isildrae

Last year i opened an ISA with Northern Rock. I opened the account with £90 with a view to adding in more as the years went on. A little from each paycheck. I cocked up apparently, with the minimum amount being £500 and me not getting enough money into the account in time. I then received an interest rate of 0.10% as opposed to 3.75%. When I spoke to the adviser on the phone, I asked, if I added money to the account to bring the amount up to the minimum needed, would my rate then change to the 3.75% rate? She told me that I couldn't deposit any money because the account has been open for more than 30 days.

Did she just mean that if I deposited more money, the rate wouldn't change because 30 days had passed or do you have to get all your savings into it within 30 days? If this is the case, when could I next add savings to the account, if at all?

I've decided to move my money on to a better deal anyway, so I suppose this is theoretical really, but I was surprised that she told me I couldn't deposit any more money. I just want to check I'm not missing something really quite fundamental about the whole process.

Obviously annoyed about my own !!!!-up, but we live and learn. I now know better for next time. Any and all advice is much appreciated.

Cheers,

I

evenasus

It sounds as though you opened a Northern Rock fixed rate ISA.

This type of account usually only allows funds in for a short period.

innovate

Many of the higher interest rate ISAs have specific terms - e.g. minimum deposit amount, limited window for pay-ins and transfers-in (if allowed at all), withdrawal penalties before maturity etc etc.

You need to carefully read the T&Cs

Isildrae

You are right with your guess Evenasus.

It's funny, I took into account the minimum deposit amount etc, I just never really thought a company would stop you giving money to them. I shall indeed pay the Ts&Cs a bit more attention in future.

Thanks both of you. Good to know it's not a blanket thing with ISAs and I just need to keep a closer eye out for little tricky trickster clauses.

badger09

Unless you've got the full amount available to pay in, or at least the most you have available in that tax year to pay in , then its usually better to avoid Fixed Rate/Fixed Term accounts.

Although they usually offer better rates than Instant Access accounts, they very often allow only an initial deposit, or short period of time to make additional deposits.

If for example, you open a 1 Year Fixed Rate account and pay in say £1000 of savings in April 2012, then find you have further spare cash in June, you're stuck You can't pay any more into your 1 Year Fixed Rate ISA, you can't transfer it, and you can't pay into another ISA until 6th April 2013

Isildrae

Gotcha. Thanks for the advice. The annoying thing is I have a bunch of disposable income from saving over the years, but I wanted to spread it out!

Seems foolish now!

Cheers Badger.

badger09

Isildrae wrote: »

Gotcha. Thanks for the advice. The annoying thing is I have a bunch of disposable income from saving over the years, but I wanted to spread it out!

Seems foolish now!

Cheers Badger.

If you have 'a bunch of disposable income' why not open an ISA now and start earning tax free interest straight away?

AndyAnchovie

Hi all, I have just realised something similar. I opened a 3 year fixed rate ISA with Northern Rock last year and transferred my ISA from another provider to NR. I knew there was a time limit so added the whole years allowance.

However I thought I'd be able to add the following 2 years as and when the new tax years started. Anyway, I just went to add this years and realised I can't. My old ISA is now locked for the 3 years and I'll have to have another ISA for this years allowance.

Can anyone validate that this is correct?

Thanks v much.

badger09

AndyAnchovie wrote: »

Hi all, I have just realised something similar. I opened a 3 year fixed rate ISA with Northern Rock last year and transferred my ISA from another provider to NR. I knew there was a time limit so added the whole years allowance.

However I thought I'd be able to add the following 2 years as and when the new tax years started. Anyway, I just went to add this years and realised I can't. My old ISA is now locked for the 3 years and I'll have to have another ISA for this years allowance.

Can anyone validate that this is correct?

Thanks v much.

Yes, that sounds right.

Most Fixed Rate/Fixed Term ISAs do not allow additional deposits after the initial opening deposit or transfer in. Lloyds has a 2 Year FR at 3.7%, which allows addition deposits but they are the exception rather than the rule.

You are however free to open another Fixed Rate or Instant Access ISA for this year's allowance of £5640.