ISA Choices

Bhamstudent

Hi, was hoping that people on here would be able to give me some advice for my ISA choice for 05/06:

At present I have £3,000 invested with IF at 5.00% and a guarantee to be 0.05% above the base rate.

I want to invest another £3,000, but am unsure as to what to do with it. As far as I see it I have three options:

1. Put it in IF

2. Open another ISA, I've been looking at National Counties, as they pay 5.50% and have a guarantee of 0.5% above the base rate, which is significantly better than the IF guarantee. However, this doesnt allow me to make any transfers in the first year, therefore leaving my current £3,000 with IF.

3. Open another ISA, say A&L at 5.4% and transfer my existing balance in. However, although this will mean more money from interest, A&L have a £30 transfer fee which will mean less money overall.
One major question that will hinge my decision is to do with transfers, and it is can you transfer two separate ISA's into a single ISA in the future, say in the 06/07 tax year?

I know that not much money is at stake here, but some help would be appreciated.

Cheers.

grumbler

You can find up to date information on available ISAs in this THREAD (posts #35+).

Bhamstudent wrote:

One major question that will hinge my decision is to do with transfers, and it is can you transfer two separate ISA's into a single ISA in the future, say in the 06/07 tax year?

Yes, you can do this if the destination ISA does not have any restrictions on transfers or amount. Generally you can consolidate all your ISAs at any time.