Best Savings Account (House Deposit)

innovate

vicx wrote: »

Just wondering, can you open a fixed rate (tax free) ISA each year as I thought you could only have the one?

Yes you can open one each year. With totally different providers if you so wish.

vicx wrote: »

Also, lets say I put £5,640 away for 3 year, when it matures cant I add another £5,640 into the same tax free ISA?

not really, no - - a fixed term account usually only allows one single payment (though you might be able to pay in your new money for the year and also transfer-in an existing ISA).

Also, when a fixed-term ISA matures, they then generally pay you peanuts interest. So you wouldn't really want to add anything to such an ISA - - - instead, you'd want to have it transferred fast to somewhere that pays a lot better interest.

The only exception I know of is the 2-year Lloyds fixed term ISA that allows multiple deposits.

Just for good measure: do not transfer an ISA yourself, ever. Always ask the new provider to do it for you. If you did it yourself, you would lose your tax-free protection.

vicx

My fixed rate ISA has automatically been transferred to a variable rate ISA. Currently 2.00% (which includes 1.50% bonus for 12 months) although I am not certain I will get the bonus rate.

When I phoned my bank I was told I could invest £5,640 this tax year with a fixed rate tax free ISA and if I was to transfer the money from my current ISA I would lose the tax free status. I am pretty sure he said I could only top up my ISA to the limit, not add the £5,640 on top of the current ISA savings but when I have logged into my account it is showing I can transfer a further £5,640 which is why I asked so I am a bit confused.

psychic_teabag

If you haven't already subscribed (paid new money in) to any ISA this year, then you can put £5640 into an ISA. It can be either a new ISA, or you can add to an existing ISA provided the account T&C allow that. e.g. it's possible that the account you have has a maximum balance, or something, which is why he's saying you can only top it up. But that would be due to an account rule, rather than an ISA rule. Beware that if you do that, you wouldn't be able to use the rest of your allowance in another account elsewhere (unless you do a transfer).

Your existing (matured) ISA is tax free, but yes, if you were to withdraw the money, it would lose the tax-free status. You can transfer it to another ISA, but not yourself using online banking or anything : you have to choose a new provider and ask them to do the transfer for you. (If you stay with the same provider, you might be able to ask them to redesignate it over to another type of ISA.)

vicx

I have added an extra £1,000 to my current ISA but I can still add £4,640 as I have unlimited deposits with my variable rate ISA but I don't know if I could transfer it all to a fixed term ISA at a later date or if I would only be able to transfer the 5,640.

The interest rates are not so good at the minute so still looking around to find the best option. Either keep it as it is (variable rate) where I have no limits on deposits or withdrawls and hold out for a better 3 year rate or lock it away now for a fixed rate & term.

innovate

vicx wrote: »

When I phoned my bank

It can pay handsomely to not just consult only one bank. There's a superb thread Kazza maintains on the forum, with the best ISA rates https://forums.moneysavingexpert.com/discussion/401374

vicx wrote: »

I was told I could invest £5,640 this tax year with a fixed rate tax free ISA and if I was to transfer the money from my current ISA I would lose the tax free status.

Either it was a misunderstanding or you were not told the truth.

Without regard to anything, you can invest £5,640 of new money into an ISA this year. Plus you can transfer your old ISA money to any ISA that allows transfers-in. Provided you follow the ISA transfer rules, i.e. ask the provider to make the transfer and not do it yourself, you will not lose your tax-free status on the old ISA. The ISA for your new investment and the one for the transfer can be the same. But they do not have to be the same.

So you can have several ISAs. They can be with the same bank/BS, but they don't have to be.

innovate

vicx wrote: »

....I don't know if I could transfer it all to a fixed term ISA at a later date or if I would only be able to transfer the 5,640.

You can ask the provider you choose for the ISA that pays better interest to transfer all or some of your existing ISA(s). Providing, of course, they allow transfers-in.

psychic_teabag

vicx wrote: »

I have added an extra £1,000 to my current ISA but I can still add £4,640 as I have unlimited deposits with my variable rate ISA but I don't know if I could transfer it all to a fixed term ISA at a later date or if I would only be able to transfer the 5,640.

The only constraint on transfers is that the current year's subscriptions stay together. If you have already added £1000 to that ISA, then when you transfer it, you must either transfer (at least) £1000 out and on the form say that you are transferring the current year's subscriptions (but don't do that to a fixed-term account), or you must leave (at least) £1000 behind and say on the form that you are not transferring the current year's subscriptions.

Alex92_2

Thought that i'd update you guys to as what I did. *Below is copied and pasted from a PM I sent to someone else on this forum*

I have upgraded my lloyds classic vantage accounts today to the new scheme they are doing, which increases my max allowence from 5k to 6k before losing any extra profit.

I have 3 accounts with them (which is the max limit), each with £6k in, £18k total. Each account will generate £235.80 of interest PA, (£19.65 PCM) after tax - all 3 adding up to £707.40 PA, (£58.95 PCM), again after tax.

Leaves me currently with ~£2k left over, but as each month I am saving around £1200, I need somewhere to put this extra bit in.

Interestingly enough, I was already considering the reality of me being able to move out within the year and it is minimal. I have worked out that I will need around £45k in my area for a decent house deposit/bills/tax/emergency left over money and money for furniture etc, which is still (as current pay rate) 2-3 years away.

So the two options I have been considering.

1) Research into ISAs, find the highest rate one and put in my excess money into that ASAP. Then when April comes, look into another one?

2) Look into locking up my money for 1-2 years with someone like Marks and Spencers, or maybe more conviniently, lloyds, who will let it grow from there.

I need to weigh up whether or not ISAs are worth it. Originally, I never went down the ISA route, because lloyds were only offering 2.20% and at the time, I was getting a much better return from the 4% vantage account.

Excuse my ignorance, but with ISAs. If I get one for example with, M&S and give them the full amount (5k) who give me 3% in April, by next April, would I be able to put another 5k into that same ISA? Or would I only be able to get an ISA with a different bank. So 2x ISAs, each with 5k inside?

Was also considering doing a regular savers sort of bank. One with First Directs 8% and pay in £300 per month. Only downside of this being that I need to have a 1st current account with them and pay in £1500 per month or face a fine, which would mean more direct debits and bouncing money around. And having another one with HSBC with their 4% Regular Savers and pay in £250 per month for that.

Or look at that 123 Santander 3% account, although, as im still living at home, most of it isnt really of any use to me.

Many thanks for helping, really appreciated.

Piratipper

May I ask why you want interest paid monthly??
You won't earn any more that way.

Alex92_2

Piratipper wrote: »

May I ask why you want interest paid monthly??
You won't earn any more that way.

When I was 13-14 (something like that.. young) I went into my abbey national to see how much interest I had for the year, I estimated it at around £350 for what I had in there (when interest rates were high!). I didnt change anything to my account and it just got updated and my yearly interest recieved was £0.53p ! So I got !!!!ed off and changed banks immediately.

I like knowing im earning every month and that I wont be stuck in a similiar situation. Where there was a new issue or something that came out and I didnt get made aware of it and losing out on lots of interest.

Also, my monthly lloyds accounts pay better than anything else I have seen on the market at the moment. Including most ISAs. Only exception for this is if I were to tie up my money for over 3 years, from what i can tell atleast..