ISA Question

version2014

Hi All,

Is this true ?

I have ISA with company A. Expires today and rate drops through the floor.

Someone has said, I can get company A to assign a new interest rate to it (a lot lower than last years) and then go to company B, and open a new ISA and use the 2013-2014 subscription allowance to pay into that one.

Is this true?

Company B would count as this years allowance
Company A just change the rate and balance stays with them.

Also if above is true at a later date, can I transfer both A+B into a new isa in following years?

badger09

version2014 wrote: »

Hi All,

Is this true ?

I have ISA with company A. Expires today and rate drops through the floor.

Someone has said, I can get company A to assign a new interest rate to it (a lot lower than last years) and then go to company B, and open a new ISA and use the 2013-2014 subscription allowance to pay into that one.

Is this true?

Company B would count as this years allowance
Company A just change the rate and balance stays with them.

Also if above is true at a later date, can I transfer both A+B into a new isa in following years?

Assuming the following:

You are asking about instant access Cash ISAs, rather than fixed rate/fixed term products
You haven't paid any new money into company A ISA since 6 April 2013
You know the 'new' ISA provider must do any transfer for you

Then, yes, all true.

Previous years' subscriptions (new money paid in) don't count towards current year's allowance £5760.

You don't have to wait until next year to transfer though. If you find a new provider with a better rate, which allows transfers in, you can ask them to transfer now.

You can split up previous years' as you wish, but must keep all current year's subscriptions together, so if you've paid anything in since 6 April you'll have to either leave it where it is, or ask the new provider to transfer it all.

version2014

Hi Badger, all assumptions correct.

I have paid £0 into "A" since the new tax year. I can't find any good ISA's which allow transers in.

So if I get "A" to convert the ISA to the new rate not the 0.05% it now is.

I can then go to company "B" open a new cash ISA and put money in that for the 2013-2104 year.

Then in say 2015-2016 and beyond...if I find a good rate which allows transfers in....I can transfer both CASH ISA's to the "C" in 2015-16 or beyond.

Is this right?

p00hsticks

version2014 wrote: »

So if I get "A" to convert the ISA to the new rate not the 0.05% it now is.

I can then go to company "B" open a new cash ISA and put money in that for the 2013-2104 year.

Then in say 2015-2016 and beyond...if I find a good rate which allows transfers in....I can transfer both CASH ISA's to the "C" in 2015-16 or beyond.

Is this right?

Your final two points are correct - you can open a new ISA with "B" for this years allowance, and in future if you find a better ISA "C" that allows transfers in you could move both "A" and "B" across to it (making sure that you do this by asking "C" to organise the transfer)

But I'm not sure what you mean about getting "A" to "convert the ISA to the new rate...." ?

xylophone

to assign a new interest rate to it

You mean that you would ask your current provider to transfer maturing ISA into another of its ISA products?

McKneff

You are overthinking, just go to Company B, open an Isa and get them to transfer all you funds into the new Isa.

version2014

p00hsticks wrote: »

Your final two points are correct - you can open a new ISA with "B" for this years allowance, and in future if you find a better ISA "C" that allows transfers in you could move both "A" and "B" across to it (making sure that you do this by asking "C" to organise the transfer)

But I'm not sure what you mean about getting "A" to "convert the ISA to the new rate...." ?

"A" has dropped the rate today to 0.5 - I can go online and "transfer my existing variable ISA to this account"

this account being the account offering 1.35%

And then open an ISA with "b" for 2.5% which does not allow transfers in.

Does that make sense?

version2014

McKneff wrote: »

You are overthinking, just go to Company B, open an Isa and get them to transfer all you funds into the new Isa.

Can't find a good rate to transfer in

badger09

version2014 wrote: »

"A" has dropped the rate today to 0.5 - I can go online and "transfer my existing variable ISA to this account"

this account being the account offering 1.35%

And then open an ISA with "b" for 2.5% which does not allow transfers in.

Does that make sense?

If you're absolutely sure your provider allows this for ISAs already held with them - then yes.

Which ISA is it?

Yes - you can open this year's ISA with 'b'

version2014 wrote: »

Can't find a good rate to transfer in

badger09

version2014 wrote: »

Hi Badger, all assumptions correct.

I have paid £0 into "A" since the new tax year. I can't find any good ISA's which allow transers in.

So if I get "A" to convert the ISA to the new rate not the 0.05% it now is.

I can then go to company "B" open a new cash ISA and put money in that for the 2013-2104 year.

Then in say 2015-2016 and beyond...if I find a good rate which allows transfers in....I can transfer both CASH ISA's to the "C" in 2015-16 or beyond.

Is this right?

Yes, but see my comments above re being 'allowed' to do this online.

There are several horror stories on here where posters have inadvertently lost several years' tax free status because they had transferred their ISAs online. Just because the website technology lets you do it, doesn't mean its 'allowed' under the ISA rules - if that makes sense.

psychic_teabag

version2014 wrote: »

Can't find a good rate to transfer in

Looks like Cheshire BS is offering 2.3% for transferred ISA (min £1k).

If you have less than that, could consider whether you get more interest overall by putting the new money in with old into that account, rather than getting a lower rate on the old money, but 0.2% more on the new money.