Can we do this and does it make sense ?

My wife and I both opened Santander cash ISA's a few days before the end of the 2012-13 tax year. These accounts had a 1 year term at 2.5%. We both invested our full ISA allowance for that year as we had not made any ISA investments previously that year.

We now have some more £'s available and want to invest our full 2013-14 ISA allowances in the same accounts as they are still paying 2.5% which is better than any other ISA's currently available.

Then at least we will have £22K or so getting 2.5% tax free until the ISA accounts reach the end of their terms just before the end of this tax year. At that point, because the interest would drop right down in these Santander ISA accounts, we would seek the best ISA's available at that time, roll our existing ISA investments into them and then, once the 2014-15 tax year is upon us, invest our full ISA allowances again, joining our rolled forward allowances.

Is this a reasonably sound way to move forward and have we understood the way ISA's work ?

Thanks in advance.

Replies

  • CKhalvashiCKhalvashi Forumite
    11.3K Posts
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Forumite
    I've never tried this, so I honestly don't know!

    Half of me says that it was for last years' ISA, and therefore can't be done.

    The other half says it can be done, as accounts can be merged.

    Someone will probably have an answer to this.

    CK
    💙💛 💔

    I can spell, my iPad can't.
  • AlwaysLearninAlwaysLearnin Forumite
    776 Posts
    Ninth Anniversary 500 Posts Name Dropper Mortgage-free Glee!
    Forumite
    Assuming your current ISA allows further deposits, your plan sounds okay to me.

    Once the rate expires, you find another ISA with the best rate that allows transfers in. That may or may not be the best one for new money for next years allowance too.
  • Assuming your current ISA allows further deposits, your plan sounds okay to me.

    Once the rate expires, you find another ISA with the best rate that allows transfers in. That may or may not be the best one for new money for next years allowance too.

    I would agree with this.
  • t0rt0iset0rt0ise Forumite
    3.8K Posts
    Part of the Furniture 1,000 Posts Name Dropper
    Forumite
    What I found this year was that the ISAs with the best rate didn't allow transfers in so I opened one ISA for new money and transferred the old ISAs to a different ISA that did allow transfers in. That way I got the best rate I could find for each ISA.
This discussion has been closed.
Latest MSE News and Guides

Mini-budget 2022: what does it mean for you?

Tax cuts and Universal Credit changes

MSE News

Income tax calculator

Updated with November NI changes

MSE Tool