What happens to old cash isa if I open a new one?

cashbuilder_2

Hi guys,

Okay, I opened my first ISA on Friday before the deadline. So, now I am unsure about the following: -

If I can spare the cash, can I open a brand new cash isa and just leave the last cash isa as it is, and if so, what happens to the old isa money? Does it still accrue interest if I decide to leave and open another this year?


Thanks for anyone's advice and clarity.

CB

Newly_retired

Yes, you can open a new one now.
Yes, your money in last year's ISA will stay there and still get interest.
Keep an eye on the rate, if it is variable. If it drops you can transfer it to your new ISA, if it accepts transfers, but don't withdraw the money, get your new ISA provider to do the transfer so you don't lose the tax-free status.

ColdIron

You can probably continue to contribute to your existing one if it has a good rate, as long as it is not fixed

cashbuilder_2

Just a couple of things I wanted to check, I understand I can open a new one, but if I transfer the old isa into a new one with my current amount (last year's) of £5640 and I want to top it up to this year's limit of £5760 do I need to be aware of anything, like the best way to pay it in or do I just do it as normal and pay in either a cheque or bank transfer?

I know it might seem obvious, but I want to be sure.

Yes, your money in last year's ISA will stay there and still get interest.

Also, in reference to the above comment, if I kept the old cash ISA from last year, and opened a new cash ISA, when you say the older one accrue's interest, the bit I don't understand is won't that be 2 cash ISA's getting interest and how can that be possible?

Many thanks for ur help.

CB

david78

You can have as many cash ISAs as you like (2 isn't a problem).

You can add your new cash to the old ISA if it allows additional deposits. That's the easiest thing to do. Just pay in by bank transfer or cheque as you prefer.

saintalan

cashbuilder wrote: »

... if I kept the old cash ISA from last year, and opened a new cash ISA, when you say the older one accrue's interest, the bit I don't understand is won't that be 2 cash ISA's getting interest and how can that be possible?

Many thanks for ur help.

CB

Hi sounds like you are new to ISAs.

This may sound like I am being rude but I don't mean to be.

ISAs continue to earn interest at the prevailing rate tax free after the first year until you cash them in. So in a way they are like regular savers. Each year you can add more capital up to the limit for that year and past and present will earn interest.

You can transfer all past ones into a single current one if you want or have them spread around. The key is, is to make sure they are earning the best interest possible e.g you may be offered rates with a bonus but the bonus will cease after a year maybe then you are left with a miserable rate.

This is the great thing about sites like this, people help you to understand and get the best deals.

If you knew all of the above, I apologize, but is written with the best intentions.

Cheers

Alan