Tell us you cash ISA questions

refluxer

hairydog said:

OK, it's less than a fortnight before the end of the tax year, and the BOE put base rate up 0.25% today.

I'd quite like to get a cash ISA this tax year, but it seems to make sense to hang on to see if the interest rates rise.

How long is it safe to leave it?

Some banks can take a while to respond to BoE rate rises (and that's if they do at all) so I wouldn't leave it too close to the deadline - it's common for some ISA offers to actually disappear (presumably due a bank's funding needs being satisfied by an influx of customers who're keen to use their allowance before the deadline), plus some banks actually withdraw all their Cash ISAs in the run up to the 6th to ensure that applications don't tick over into the new tax year (Shawbrook, for example, are withdrawing all their Cash ISAs at 3pm on 3rd April) 

Another other risk with leaving it too close to the 6th is that a large (eg. £20k) payment to a new account might trigger your bank's anti-fraud measures and get blocked, leading to delays.

If you're wanting to hold off to see what happens to fixed rates, one option could be to open an Easy Access Cash ISA now and then you'd be free to transfer to a fixed rate whenever you like. To minimise the hassle, make sure you choose a provider who utilises the BACs ISA transfer service (there's a handy list here) to ensure that future transfers are done online, without the need for posting off paper forms.

VNX

Also worth looking into funding windows for example Paragon have a 28 day window to deposit funds if you took that out for example that takes you up to the date of the tax year change if something better comes up in next week or so just don’t fund it but if you get to say end March and nothing does then fund that before end of the tax year 

Johnjdc

hairydog said:

OK, it's less than a fortnight before the end of the tax year, and the BOE put base rate up 0.25% today.

I'd quite like to get a cash ISA this tax year, but it seems to make sense to hang on to see if the interest rates rise.

How long is it safe to leave it?

There's no reason fixes would rise. I suspect the next move in fixed rates is down.

You could open the best one but not fund it yet, just in case.

If variable is your bag, just open the best one now but do a transfer if better comes along?

XRocker

Good Afternoon
Please can somebody help me.
I have a question regarding the interest rate rises and how these affect Cash ISAs last year.
Please consider the following hypothetical scenario.
Some numbers and values may not be accurate but are used for illustrative purposes.
At the start of the tax year 2022/23 a Cash ISA was opened with £100,000 in it when the interest rate was 0%.
At the end of the tax year 2022/23 the interest rate was 4%.
There were a couple of months when the interest rate was 1%, 2%, 3% etc.
At the end of the tax year 2022/23 the total interest paid on the £100,000 Cash ISA was £2,000 which is 2% of £100,000.
The question: why was it only 2%, is it because 2% was the average interest rate percentage across the whole year.
Many Thanks

masonic

XRocker said:

Good Afternoon
Please can somebody help me.
I have a question regarding the interest rate rises and how these affect Cash ISAs last year.
Please consider the following hypothetical scenario.
Some numbers and values may not be accurate but are used for illustrative purposes.
At the start of the tax year 2022/23 a Cash ISA was opened with £100,000 in it when the interest rate was 0%.
At the end of the tax year 2022/23 the interest rate was 4%.
There were a couple of months when the interest rate was 1%, 2%, 3% etc.
At the end of the tax year 2022/23 the total interest paid on the £100,000 Cash ISA was £2,000 which is 2% of £100,000.
The question: why was it only 2%, is it because 2% was the average interest rate percentage across the whole year.
Many Thanks

Yes                  

badger09

masonic said:

XRocker said:

Good Afternoon
Please can somebody help me.
I have a question regarding the interest rate rises and how these affect Cash ISAs last year.
Please consider the following hypothetical scenario.
Some numbers and values may not be accurate but are used for illustrative purposes.
At the start of the tax year 2022/23 a Cash ISA was opened with £100,000 in it when the interest rate was 0%.
At the end of the tax year 2022/23 the interest rate was 4%.
There were a couple of months when the interest rate was 1%, 2%, 3% etc.
At the end of the tax year 2022/23 the total interest paid on the £100,000 Cash ISA was £2,000 which is 2% of £100,000.
The question: why was it only 2%, is it because 2% was the average interest rate percentage across the whole year.
Many Thanks

Yes                  

More accurately… for every day the interest rate was 1%, 2%, 3%, & 4% interest would be calculated at that rate for those days. The total interest would then be added at maturity date. 

Trojan444

Can my wife and I who are joint holders of a Nat West account both put in the maximum in the ISA account? Thank you

masonic

Trojan444 said:

Can my wife and I who are joint holders of a Nat West account both put in the maximum in the ISA account? Thank you

No, not the ISA account (singular). You can each hold separate ISA accounts and pay the maximum into your own respective account. You cannot have a joint ISA, this is against the ISA rules.

Zuzi

For a Stocks & Shares ISA where the return can be both positive and negative, how are transfer values calculated? E.g. I have a S&S ISA that I know I have contributed 5,250 pounds into last tax year. I want to transfer last year's "money" into a new ISA. Currently the ISA is showing a small plus. But how can I find out how much of that plus should be allocated to last year?
Let's say the return would be negative, and the 5,250 is now less. I can't logically transfer 5,250 out, so how would I know how much I can?
I can't get my head around this part so would appreciate if someone could clarify. I am in the process of transferring out last year's contributions from my S&S ISA but am not even certain if "contributions" is the right word because of the fluctuating value... I just hope I filled in the transfer form correctly, I didn't know what amount to put in so just added the comment that I want to transfer everything from previous year. 

ETA - I just noticed this is a thread about Cash ISA questions, sorry! If there's a better place for this please let me know.

masonic

Zuzi said:

For a Stocks & Shares ISA where the return can be both positive and negative, how are transfer values calculated? E.g. I have a S&S ISA that I know I have contributed 5,250 pounds into last tax year. I want to transfer last year's "money" into a new ISA. Currently the ISA is showing a small plus. But how can I find out how much of that plus should be allocated to last year?
Let's say the return would be negative, and the 5,250 is now less. I can't logically transfer 5,250 out, so how would I know how much I can?
I can't get my head around this part so would appreciate if someone could clarify. I am in the process of transferring out last year's contributions from my S&S ISA but am not even certain if "contributions" is the right word because of the fluctuating value... I just hope I filled in the transfer form correctly, I didn't know what amount to put in so just added the comment that I want to transfer everything from previous year. 

ETA - I just noticed this is a thread about Cash ISA questions, sorry! If there's a better place for this please let me know.

The answer is with difficulty. This is no doubt part of the reason why partial transfers are not offere by some providers. You would need to provide instructions on the transfer form such as requesting transfer of previous years subscriptions in full and instructing that current year subscriptions are not transferred. The losing provider would then have to work it out at the point of transfer.