New ISA question

curtis122

As I posted this in Savings by mistake I have now put it in the correct section!

I understand that you can only pay into one active cash ISA in a year at one time.

If for example though I open a cash ISA now and start paying in some money and then a better rated ISA turns up in a months time can I open that one and then transfer the current one into it and continue to pay up to the new limit for this year then maybe do the same if another better one comes out later on or is it a case of I can only start paying into one and have to keep that one till the next FY year until I can get a new one?

Gromitt

Transfers are not included in your limit and you can do that as often as you like. Once the transfer is complete, you can deposit new funds in the new account as the old account will no longer exist.

david78

curtis122 wrote: »

If for example though I open a cash ISA now and start paying in some money and then a better rated ISA turns up in a months time can I open that one and then transfer the current one into it and continue to pay up to the new limit for this year then maybe do the same if another better one comes out later on

Yes. You can open accounts to effect transfers whenever you like. Its not linked to the tax year in any way.

curtis122

When you talk about transfers do you mean transfers of old ISA's?

Ignoring any old ISA's if for example this is the very first year I decide to pay into an ISA. So if I open one now we are in a new tax year start paying in towards my £5760 allowance this year then later on this year a better rated ISA appears are you saying I can then open that one which has the better rate and transfer what I have paid currently into that new one and then continue paying in up to my allowance?

david78

Yes you can.

curtis122

That part is clear now thankyou. I think I'm confusing myself a bit the more I read!

I have seen ISA's ask for a minimum opening figure so if I have already paid £2500 towards this years allowance in a 2% ISA then a 3% one turns up that needs a £2000 opening amount does my current £2500 cover this account opening payment or does this have to be 'new' paid money in not transferred money in?

david78

Yes it does. Transfering in over £2000 will satisfy the minimum opening figure.

badger09

But you MUST use the new provider's transfer process.

And you must keep all your current year's subscriptions together. So in your example you couldn't just transfer £2000 of your £2500 paid in this year - the whole £2500 would have to be transferred to your new 3% ISA.

PS if a 3% one turns up - don't forget to tell us will you