Understanding interest paid - Santander Direct ISA issue 9

Mela121

badger09 wrote: »

You know that, I know that, and many other posters know that

However, it is quite clear from Mela121's posts that he/she hasn't even grasped the basics of how interest is calculated

People have to learn somehow, I came here to try and learn from people who understand how these things work since, as I said, i'm pretty clueless about these things, I wouldn't ask if I already knew :P. Trust me, I know more now than I did earlier this evening!

I was thinking about transfering my last years ISA and then putting in approx £2000 (or more) new money as a lump sum

vickssinex

Mela121 wrote: »

Also since the 2.80% bonus is valid until July should I hold off transfering till then? And if I do transfer will I lose any interest?

I would ask them when the bonus rate on your account actually expires-you may be surprised. I know I was!

badger09

Mela121 wrote: »

People have to learn somehow, I came here to try and learn from people who understand how these things work since, as I said, i'm pretty clueless about these things, I wouldn't ask if I already knew :P. Trust me, I know more now than I did earlier this evening!

I was thinking about transfering my last years ISA and then putting in approx £2000 (or more) new money as a lump sum

Sorry - I wasn't getting at you!

I know people have to learn, and that's why you asked the questions you did.

If you look at my posts, you'll see I try to be helpful where I can, but I wasn't convinced that you'd really understood the previous answers

The Aldermore fixed rate isn't brilliant and if you have your existing ISA transferred to it and pay in £2k lump sum, you won't be able to pay any more into an ISA until 6th April next year.

As you're getting 3.3% until 6th? July, I'd pay your £2k lump sum into the Santander ISA then think about transferring when the rate drops. Hopefully you'll still be able to find something around 2.25% then - but no guarantees

Mela121

badger09 wrote: »

As you're getting 3.3% until 6th? July, I'd pay your £2k lump sum into the Santander ISA then think about transferring when the rate drops. Hopefully you'll still be able to find something around 2.25% then - but no guarantees

That might be something to consider, I hadn't thought about that. So if I put in £2k of my current years allowance and then transfer everything to a new ISA when my interest slumps to 0.50%, will I still have £3760 to put into the new ISA or will I not be able to pay in anymore at all? (I'm reading conflicting information, I've read that you can only make payments into one ISA per tax year, but i've read elsewhere that you can have your yearly allowance transfered to a new ISA manager?)

My Santander ISA also says it pays its interest annually in March, but will I still receive a payment of the interest gained between now and July (which should be 2.80%)when my rate falls?

david78

Yes, when you transfer in July, you will have £3760 of this years' allowance left, and can will be able to top up the ISA once its transfered if you want to.

This is one way you can legitimately pay into more than one cash ISA in a tax year (Innovate would approve )