When to open ISA?

Heather2012

Hello,

I would like to start saving some money into an ISA. Am I best putting my current savings into an ISA now or wait until after the 5th April? If I open one now at 2% for example, will that rate drop on Friday because it's the end of the ISA year? Or will I keep that rate for another 12 months?

Thanks in advance for your help.

Heather

p00hsticks

How much savings do you actually have, and how much more will you be able to add over the next year ? Are you or will you be a tax payer ?

The ISA allowance for this tax year (finishing Friday) is £5,640, and for next tax year £5,760.

If you think you have / can save those sorts of amounts, then it's sensible to open a cash ISA NOW with as much as you can in order to use your ISA allowance this year - if you don't use it, you'll lose it. You can always transfer to a different ISA paying a better rate if you need to in the future.

If you don't think your current savings and what you can save over the next year will total more than £5,760, you might as wel lwait until next year (week) now rather than be in a mad dash to open one in the next two days.

ISAs come in all shapes and sizes, just as normal savings accounts do - some are variable rate / instant access and the rate could drop at any time, but others are fixed rate and will give you an agreed rate of interest for a specified time, usually in return for you not being able to access your money during that time.

Heather2012

Thanks for your reply.

I think I'll wait until next week - I was just wondering why quite a few people were trying to open ISAs before the new year started! I understand now - thanks for your help


Heather

Paul_Varjak

Heather2012 wrote: »

Thanks for your reply.

I think I'll wait until next week - I was just wondering why quite a few people were trying to open ISAs before the new year started! I understand now - thanks for your help


Heather

Waiting is probably not the sensible route for the very reasons given by p00hsticks.

20vt-rs

Paul_Varjak wrote: »

Waiting is probably not the sensible route for the very reasons given by p00hsticks.

Is this unless this years ISA allowance is already maxed out? So if this years is maxed out, then wait until 6th April onwards to open a new one?

Paul_Varjak

20vt-rs wrote: »

Is this unless this years ISA allowance is already maxed out? So if this years is maxed out, then wait until 6th April onwards to open a new one?

I don't think the OP has maxed-out any ISA this year. I would guess she has not even saved in an ISA this year.

20vt-rs

Paul_Varjak wrote: »

I don't think the OP has maxed-out any ISA this year. I would guess she has not even saved in an ISA this year.

No thats right, so on that basis they should not wait until the new year to open one and put money into it, however on the flip side, my comment above would mean yes to waiting (only if one was maxed out this year)

Paul_Varjak

There is really no flip side, other than, like everyone else, she can save in one Cash ISA each year. If she had already maxed out this year's ISA she would not have even asked the question for you to respond to.

20vt-rs

Paul_Varjak wrote: »

There is really no flip side, other than, like everyone else, she can save in one Cash ISA each year. If she had already maxed out this year's ISA she would not have even asked the question for you to respond to.

The flip side was aimed at others and not the OP. A "both sides" point of view to highlight either scenario for readers of this.