Two ISAs same year, one for transfer?

osaddict

Guys, I'm slightly confused, I've got a NatWest ISA on which the rate has just plummeted to nearly zero, tonight I saw the Santander ISA mentioned in The Evening Standard and thought it looked decent.

I filled up my subscription for this year pretty much as soon as I could so I'm maxed out for this year and I have quite a few previous years to move in.

I was in the process of applying and read the last stage carefully, this condition confused me:

"I have not subscribed and will not subscribe more than the Cash ISA subscription limit to a Cash ISA;"

Well, I have subscribed to the NatWest one, this implies I can't open this ISA yet and I'll have to wait until next week? - When potentially the rates will plumet and I'll not get as good a deal as the Santander one.

Have I misunderstood this condition? - I was under the impression that one could open an ISA at any time (October for example) and transfer in current ISAs (assuming the account allowed transfers in).

Any advice much appreciated

innovate

"subscribe" means "deposit new money"
"open account" does not mean you you deposit new money, i.e. "subscribe". You can open as many ISAs as you want, really. You just need to put your thinking cap on when it comes to depositing. To keep it simple for now:

If you open a new ISA today, you can

1. transfer your existing ISAs into it (providing the new ISA accepts transfers in, and you must check whether there are any penalties transferring your old ISA. You also must ask the new provider to make the transfer, do not do it yourself
2. deposit your 2013-14 allowance into it as soon as April 6 2013

osaddict

Thanks innovate, that makes sense, I guess the key to it is that there's nothing being paid into the new account thus taking me over the limit. I suppose if I had say 4k in an account and opened another one and put in 1k (so still below the threshold) that wouldn't be allowed because it's 'subscribing' to two accounts, despite their sum being below the allowed levels.

I guess that takes me on to my next question and one I sort of asked in someone elses thread (sorry!), if I opened this account now (so still within 2012-13 tax year) and discovered next week (so the 2013-14 tax year) someone else had a 3.4% ISA account, I'm guessing I could just open that account and transfer across.

From what I can tell NatWest don't have any penalties, Santander also accept old ISAs and they don't penalise for moving out, so it would seem I could shift it if there were some better deals next week (my guess is this is unlikely though)

Thanks for the clarification

innovate

osaddict wrote: »

Thanks innovate, that makes sense, I guess the key to it is that there's nothing being paid into the new account thus taking me over the limit. I suppose if I had say 4k in an account and opened another one and put in 1k (so still below the threshold) that wouldn't be allowed because it's 'subscribing' to two accounts, despite their sum being below the allowed levels.

yep, you got it. Not wise to put money into more than one "active" ISA in the same tax year- - the HMRC will come after you relentlessly sooner or later, even if you didn't go over you annual allowance.

osaddict wrote: »

I guess that takes me on to my next question and one I sort of asked in someone elses thread (sorry!), if I opened this account now (so still within 2012-13 tax year) and discovered next week (so the 2013-14 tax year) someone else had a 3.4% ISA account, I'm guessing I could just open that account and transfer across.

yes you could, if it's an instant access ISA you have. It's a very theoretical situation though

osaddict wrote: »

From what I can tell NatWest don't have any penalties, Santander also accept old ISAs and they don't penalise for moving out, so it would seem I could shift it if there were some better deals next week (my guess is this is unlikely though)

Penalties aren't by bank, they are by account. You need to understand the T&Cs of the account you signed up for.

Generally speaking, instant access ISAs don't have transfers/withdrawal restrictions. Better interest rate ISAs are most likely to have some sort of limitations or penalties on early withdrawal or transfers, and some prohibit them entirely. You just have to read the T&Cs (not as hard as it may sound!)

Casciana

Can anyone speculate what rates might be for 2013 - 2014 Cash Isa's?

innovate

https://forums.moneysavingexpert.com/discussion/401374

osaddict

Thanks for the further clarification innovate, going to open the Santander ISA this evening, as you said in another thread I posted in and as I said above, can always move out penalth free if rates are better in a couple of weeks.