ISA question

marky_p

Hi everyone,

I currently have around £11k in a Nationwide Online ISA that I have paid into over the last 2 years. The ISA pays 3.1% until August, when I lose the bonus and it drops to (I believe) 1%.

I understand that I can only pay into 1 ISA a year, so if I pay into the existing Online-ISA I can't then open a new ISA this year (after I lose the decent rate)?

Is the best course of action to open a new ISA now (for year 13/14) and then transfer in the money from my existing Online ISA in September?

I obviously don't want to pay this years allowance into an account that will have a rubbish interest rate from Sept '13 onwards.

Any help would be appreciated!

marky_p

I should probably add - I currently only have a further £1200 to pay into a new ISA and am capable of depositing £500 a month into a Regular Savings account (thus earning 2.5%, although obviously this is subject to tax) so would it be an idea to just pay into my regular savings for a few months and seeing what's on offer in September - then moving the whole lot together?

innovate

marky_p wrote: »

I understand that I can only pay into 1 ISA a year

This is not correct. As I have just written in another thread:

As has been discussed on the forums countless times, and as supported by the HMRC website, you can open as many ISAs as you like each year.

You can also deposit into more than one cash ISA a year provided you have previously transferred (using the formal transfer process) your entire cash ISA deposit for the year.

marky_p wrote: »

Is the best course of action to open a new ISA now (for year 13/14) and then transfer in the money from my existing Online ISA in September?

May be, may be not. It depends on the interest rates you get, and whether you will be able to transfer your existing ISA in in October. The former you can check now, and you can check whether any new ISA in principle allows transfers in. However, you probably won't find an ISA with a guarantee that transfers-in will be accepted in Ocotber. So you have to take a bit of a gamble there.

marky_p wrote: »

I should probably add - I currently only have a further £1200 to pay into a new ISA and am capable of depositing £500 a month into a Regular Savings account (thus earning 2.5%, although obviously this is subject to tax) ...........

2.5% in a Regular Saver sounds plain terrible - - you can get 6% and 4% Reg Savers quite easily, and some current accounts pay 5% and 3% interest.

marky_p

innovate wrote: »

This is not correct.

So if I continue to pay into my existing online ISA now, am I able to then open a new one in September and transfer my balance in? (assuming that I can find an ISA that allows me to do so?)

I don't want to continue paying into my existing ISA at 3.1% if once I get to Sept the rate drops right off. But if I can transfer in September it'd make sense to continue paying in for now?

I find this whole business really baffling.

And in regard to the Regular Savings - I don't really use that account as all of my savings go into my ISA (until of course, I hit my annual limit)

grantmo

I'm in the same situation as you Marky, I think I'm going to keep paying into my nationwide isa from last year then transfer everything in oct when the rate drops. I was looking at the leeds isa but thats closed now and it didn't guarantee you could transfer in october.

although I'm probably not the best giving advice as I'm new to this too.

DragonQ

marky_p wrote: »

So if I continue to pay into my existing online ISA now, am I able to then open a new one in September and transfer my balance in? (assuming that I can find an ISA that allows me to do so?)

Yes, you can.

marky_p

DragonQ wrote: »

Yes, you can.

Didn't realise that, thanks!

grantmo wrote: »

I'm in the same situation as you Marky, I think I'm going to keep paying into my nationwide isa from last year then transfer everything in oct when the rate drops. I was looking at the leeds isa but thats closed now and it didn't guarantee you could transfer in october.

although I'm probably not the best giving advice as I'm new to this too.

Think I'll be doing the same.

DragonQ

grantmo wrote: »

I'm in the same situation as you Marky, I think I'm going to keep paying into my nationwide isa from last year then transfer everything in oct when the rate drops. I was looking at the leeds isa but thats closed now and it didn't guarantee you could transfer in october.

It might even be the case that the 2% rate that the Nationwide ISA drops to will be unbeatable in October anyway!

grantmo

DragonQ wrote: »

It might even be the case that the 2% rate that the Nationwide ISA drops to will be unbeatable in October anyway!

Mine is the online Isa issue 4 which rate drops to 1% , I think I'd be happy with 2% in October by the way things are going