Cash ISAs: The Best Currently Available List

wattc

Hi all.

Trying to understand ISA's, never really got my head around them!

Let's say I have an ISA already with £5000. The rate is due to drop to almost nothing on 9th April.

I've been looking around and am a bit confused about ISA's that do or don't allow you to "transfer".

Does it mean that if I opened a new ISA on 9th April, move my £5000 in, that I'd only be able to add another £760 during 2013/14?

KTF

When the new tax years rolls round the amount you can get put in is 'reset' to that years limit.

You can open a new ISA that allows transfers in, transfer in last years ISA then top it up with this years limit.

wattc

So I can only open a new ISA that allows transfers of old ISAs, otherwise it would only be £760?

As I probably would only transfer the £5000 and probably won't be paying anything else in during 2013/2104, would it be worth going down the second option of a non-transfer in? Would the amount of interest be worth that much more than an account that does allow transfers?

KTF

If you dont open one that allows transfers in then you would have 2x ISA.

One for last tax year.
One for this tax year.

You dont have to roll them up into one if you dont want to - sometimes the 'best' ISA for the new tax year dont allow transfers in for example.

Whether you roll them up or not is dependant on the rate offered.

wattc

KTF - nope, I'm lost.

Let's say that I didn't pay anything into current ISA 2012-2103.

Are you saying that if I opened a new ISA on 9th April, which allowed transfers in, that I could transfer in my existing £5000, pay in £5,640 for 2102/2103 AND £5,760 to this new ISA before April 2014?

Is that what you mean by "If you dont open one that allows transfers in then you would have 2x ISA"?

KTF

wattc wrote: »

KTF - nope, I'm lost.

Let's say that I didn't pay anything into current ISA 2012-2103.

Are you saying that if I opened a new ISA on 9th April, which allowed transfers in, that I could transfer in my existing £5000, pay in £5,640 for 2102/2103 AND £5,760 to this new ISA before April 2014?

Assuming you have not paid in to 12/13 tax year ISA then you could open a new ISA in the 13/14 tax year, transfer over your existing £5000 and pay in £5760 (allowance for 13/14).

You could not pay in £5640 for 12/13 as well as the payment would be in the 13/14 year so that allowance has been 'lost'.

The simple way of looking at it is that an ISA is a savings account that allows you to pay in up to a max of X per year.

If you dont pay in X in the year then the opportunity to do so is lost.

If you have already paid in to an ISA in previous tax years then you can either combine them or leave them as individual accounts.

wattc

KTF wrote: »

If you dont open one that allows transfers in then you would have 2x ISA.

One for last tax year.
One for this tax year.

So what exactly did you mean by this?

KTF

You dont have to combine ISA together so you could open one for 12/13 and another one for 13/14 and leave both running concurrently.

For example.

The 12/13 ISA you opened is still a competative rate and the one you want to open for 13/14 doesnt allow transfers in so you decide to leave both open.

Or

The 12/13 ISA you opened has a bonus that drops off in the new tax year and the one you want to open for 13/14 allows transfers in so you decide to combine the two together to get a better rate on both amounts.

wattc

So you are saying I could transfer my £5000 to a new ISA on 9th April with a better rate.

Then also open a second ISA on 9th April and add up to £5,760 during the year up to April 2014?

So I could have two ISA bank accounts and only one would count towards 2013/2104 total of £5,760, even if both opened in new 2013.2014 tax year?

KTF

Assuming you have £5000 in an existing ISA on a poor rate and assuming you open a 13/14 ISA that allows transfers and add no new money then yes.

After doing the above you can open a second ISA (i.e. one that pays more but is for new money only) and this years allowance into that.

wattc wrote: »

So I could have two ISA bank accounts and only one would count towards 2013/2104 total of £5,760, even if both opened in new 2013.2014 tax year?

Yes, you can open as many ISA in a tax year as you like but only pay 'new money' into one. The other ISA you open can be used for transfer/consolidation of existing ISA.