ISA confusion

JamesHetherington

Sorry if this sounds like a silly question but the web is riddled with inaccuracies with regards to savings accounts. I am just completely bewildered by it all!

I have an ISA that I opened on April 5, 2013, which has an interest rate of 1.95 percent. I was confused and initially put some money (less than £1000) into the account on April 5, 2013 but took it out on the same day because I had another older ISA account and didn't know I was allowed to have two open at the same time

So no money went in this account and I haven't made any deposits/withdrawals since the beginning of this tax year on April 6.
Can I put money until this account now and will it still pay the full rate of interest after April 5?

(I'm completely new to saving, as you might have guessed).

Thank you for your time!

badger09

JamesHetherington wrote: »

Sorry if this sounds like a silly question but the web is riddled with inaccuracies with regards to savings accounts. I am just completely bewildered by it all!

I have an ISA that I opened on April 5, 2013, which has an interest rate of 1.95 percent. I was confused and initially put some money (less than £1000) into the account on April 5, 2013 but took it out on the same day because I had another older ISA account and didn't know I was allowed to have two open at the same time

So no money went in this account and I haven't made any deposits/withdrawals since the beginning of this tax year on April 6.
Can I put money until this account now and will it still pay the full rate of interest after April 5?

(I'm completely new to saving, as you might have guessed).

Thank you for your time!

Whether or not you can still pay money into this ISA depends on the T&C of the particular ISA. 1.95% a year ago sounds like an instant access product, in which case you can probably still pay money in.

However, you'd need to check whether that particular ISA is still paying 1.95% now - many instant access ISAs drop their rate after 12 months.

More important though is whether an ISA is the best place for your savings anyway! Have a read around the forum -there are several current accounts paying much better rates, so even after tax is deducted, you'll get more interest than in an ISA.

jimjames

For £1000 you can get 12.5% by using 2 current accounts so more than 10x more than you can get in an ISA.

Far better to get a higher rate and pay tax than the pittance inside an ISA that is tax free.

Accounts are Nationwide 5% & Halifax £5 per month but various threads explain more about them.

JamesHetherington

Thank you for your responses.

There doesn't seem to be any clarity in the T&Cs of the account, although I fully agree that there are much more effective ways to save. I'll hardly be at a major loss even if I don't receive the interest!

ackworth_lad

Mine is a slight variation on this question. I have opened an ISA for this year but haven't deposited any money. Is this ISA regarded as active, even though there is no money in it? My reason for asking is that I would now like to open a fixed rate ISA but I dont know if I can?

Vortigern

ackworth_lad wrote: »

Mine is a slight variation on this question. I have opened an ISA for this year but haven't deposited any money. Is this ISA regarded as active, even though there is no money in it? My reason for asking is that I would now like to open a fixed rate ISA but I dont know if I can?

You can open a fixed rate ISA now if you wish. The rules say you can't subscribe to 2 cash ISAs in the same year. You haven't subscribed to the first one yet. (Subscribe = pay money in)

JamesHetherington

After all that, and having opened a new ISA and scrutinised its terms & conditions to ensure I wouldn't miss out, I received the grand sum of £0.98 in gross interest That equates to an interest rate of something like 0.02 percent!!!!!

eskbanker

JamesHetherington wrote: »

After all that, and having opened a new ISA and scrutinised its terms & conditions to ensure I wouldn't miss out, I received the grand sum of £0.98 in gross interest That equates to an interest rate of something like 0.02 percent!!!!!

Not sure if you fully understand how interest works, but it's calculated and earned daily on the balance on that day, so if you had cash in an ISA for one day, you'd get 1/365th of the quoted annual rate in interest, regardless of whether it's the first or the last day of the tax year....