Transfer plus add new money into ISA

davidm_uk

I have an existing Nat West ISA, with a bonus that ends 30 Sept 2013, with about £90K in there. I have new money to put into an ISA for this year.

I was going to put the new money into the exisiting ISA, then transfer the lot to a new ISA in Oct 2013. I now realise that I can't do this (pay into two different ISAs in the same year).

My best option seems to be to put the new money into a new ISA now (eg Nat West Web ISA Issue 3, which pays 2.25% with bonus until Sept 2014), then transfer my exisiting ISA into this new ISA in Oct 2013. This assumes that Nat West don't close the new ISA to transfers before Oct this year.

My wife is in the same position with her ISAs. I don't want fixed term ISAs.

Does this seem reasonable, or can anyone spot a flaw in my plan.

saintalan

davidm_uk wrote: »

...

I was going to put the new money into the exisiting ISA, then transfer the lot to a new ISA in Oct 2013. I now realise that I can't do this (pay into two different ISAs in the same year).

...

Yes you can, you just cant have money in both at the same time. So once transferred its no longer in the first one but the second one.

Do it either of your ways just go with the best return.

Cheers

Alan

BobQ

If your existing ISA only has money in it deposited in previous tax years you can add to it in this year provided that the ISA account allows further deposits (if it does not you cannot do so).

The disadvantage of adding money to the existing ISA is that you are then limited to transferring money only to those ISAs that allow transfers. If you put the ISA for this year into a different ISA you can get the best rate available now.

Why are you only considering Nat West?

davidm_uk

I was in the process of adding new money into my existing ISA when, at the final confirmation step, a warning message appeared reminding me that I could only subscribe to one cash ISA in any given financial year. I took this mean that, in October when the bonus expires, I'd have to leave all the money in this ISA, at a paltry rate, until next financial year.

That's why I revised my plan, to put new money into a new ISA with a bonus rate extending to Sept 2014, then transfer the exisiting ISA money into it in Oct 2013 when the bonus on the existing ISA runs out at the end of Sept 2013. (I have emailed Nat West to get their take on the rules).

I have looked at other ISA's, and none seem significantly better than staying with Nat West (with a new ISA paying 2.25%). I want an ISA with no withdrawal restrictions, no fixed term, online setup and management, plus there's a convenience factor in not having to set up new accounts with other suppliers (although I do have other accounts with Halifax and Santander).

innovate

davidm_uk wrote: »

........ I could only subscribe to one cash ISA in any given financial year.

this is a correct statement

davidm_uk wrote: »

I took this mean that, in October when the bonus expires, I'd have to leave all the money in this ISA, at a paltry rate, until next financial year.

This isn't the correct interpretation.

You are allowed to transfer (using the official ISA transfer process) your ISA anytime you like. You just have to transfer all of your current year's ISA to a new provider, and you can then make further deposits.

Picture it with this example:

• you have opened your one ISA for 2013-14
• you have asked ISA provider A to look after it for you, and you deposit £2K. That means you have subscribed £2K to your ISA (not to the provider)
• you then ask ISA provider B to transfer all of your ISA from provider A. Once that it complete, you then deposit another £3K. That means you now have subscribed £5K to your ISA
• you still have £760 left of your allowance. You can put this into your ISA, looked after by provider B (or you could even get another ISA provider involved, with yet another transfer).

davidm_uk

Thanks innovate.

I'll wait a few days to see how Nat West reply to me email, so that I've got something in writing from them!

Cheers,
David