What does no transfer in mean?

iansmum

My OH and I both have an ISA with the Nationwide which we have had for over a year and were recently informed that our bonus rate at 3.1% would carry on till August this year. Now I see that we could have one at 4.25% as we are joint flexaccount customers. Can we close these ISAs and reopen them at the new rate? Not really sure what the terms all mean!

Torry_Quine

No transfer in means that only new funds can be put into it. You can't transfer in money from an existing ISA.

iansmum

Hi
So can I close the ISA - put it in my flexaccount, and then open a new ISA?

zagfles

iansmum wrote: »

Hi
So can I close the ISA - put it in my flexaccount, and then open a new ISA?

Yes, but it'll count as this year's ISA allowance. They have the no transfer rule to limit the amount people can put in.

Money_maker

If you're planning to put the limit for this years ISA allowance in the new ISA then leave the old one as it is for the mo until the rate goes down. If you put your old ISA funds in your flexaccount then they lose their tax free status.

MoneySaverLog

So what people are saying is that if you invested £5,340 last tax year, you also get a new allowance this tax year of £5,640 so potentially you could have £10,980 sitting in ISAs this tax year plus tax free interest on the lot. Some have several years of ISA allowances saved so over time this can be considerable.

If the ISA was to allow transfers in you'd be able to have the lot potentially in one account earning the same high rate of interest.

However this one, if it does not allow transfers in, will only allow this years ISA allowance of £5,640. You'd have to keep older ISA's somewhere else, and no doubt have to do a transfer to get better rates as they diminish overtime to a ISA that does allow transfers in. But a word of warning on transfers, make sure you complete a transfer form from your new provider, instead of withdrawing the money yourself, otherwise you'll end up losing the tax free status of that money.

thenudeone

If you take the money out of the old ISA, transfer it tour flexaccount, then put it in the new ISA, that's acceptable, but you can't put any more in the old ISA, and you can't put any more in teh new ISA because you've used up the allowance.

So if you do that, then at the end of this year the most you can have earning tax-free interest is £5640.

If you leave the old ISA and use your new ISA for new savings, the most you can have earning tax-free interest is £10980 (5340+5640), which is much better.

Whether this is an issue for you depends on whether you'll have more to save this year.