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Do I stay with ISA or move - don't understand maths
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Legacy_user
Posts: 0 Newbie
Hi,
My problem is that I struggle to work out how much I will earn in my ISA at the end of the year and whether it is better to switch.
Some facts about my current ISA:
* I have £11800 in a cash ISA which is at a rate of 1.79.
* I have been told that this ISA will not become a 15k ISA.
* This is a high rate and is because I am a "loyal customer" though I have not seen this rate written down (should I ask for this in writing).
* I have maxed out this years cash contribution.
I have seen another ISA at a rate of 1.35% and will allow 15K when that limit starts. It will allow transfers.
So here is my question:
How much would I have to invest monthly from July in the other ISA to make it worth moving - assuming I cannot do the full 15K?
Can anyone help?
Alternatively, if someone can explain the maths then I will work it out for myself - I used to be really good at maths but just cannot make head or tail of this.
Thanks
Jason
My problem is that I struggle to work out how much I will earn in my ISA at the end of the year and whether it is better to switch.
Some facts about my current ISA:
* I have £11800 in a cash ISA which is at a rate of 1.79.
* I have been told that this ISA will not become a 15k ISA.
* This is a high rate and is because I am a "loyal customer" though I have not seen this rate written down (should I ask for this in writing).
* I have maxed out this years cash contribution.
I have seen another ISA at a rate of 1.35% and will allow 15K when that limit starts. It will allow transfers.
So here is my question:
How much would I have to invest monthly from July in the other ISA to make it worth moving - assuming I cannot do the full 15K?
Can anyone help?
Alternatively, if someone can explain the maths then I will work it out for myself - I used to be really good at maths but just cannot make head or tail of this.
Thanks
Jason
0
Comments
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if, as you say, you have maxed out this years contribution, you cant put money into another IsA till the start of the next tax year ????
You can only contribute money into 1 ISA per tax year.make the most of it, we are only here for the weekend.
and we will never, ever return.0 -
I have maxed out this years contribution as things stand now i.e. 5K. In July, I could increase this into a new 15K ISA.This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com0
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I thought you could transfer into another ISA - even if you've made contributions in that tax year?This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com0
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moneyunwise wrote: »Hi,
My problem is that I struggle to work out how much I will earn in my ISA at the end of the year and whether it is better to switch.
Some facts about my current ISA:
* I have £11800 in a cash ISA which is at a rate of 1.79.
* I have been told that this ISA will not become a 15k ISA.
* This is a high rate and is because I am a "loyal customer" though I have not seen this rate written down (should I ask for this in writing).
* I have maxed out this years cash contribution.
I have seen another ISA at a rate of 1.35% and will allow 15K when that limit starts. It will allow transfers.
So here is my question:
How much would I have to invest monthly from July in the other ISA to make it worth moving - assuming I cannot do the full 15K?
Can anyone help?
Alternatively, if someone can explain the maths then I will work it out for myself - I used to be really good at maths but just cannot make head or tail of this.
Thanks
Jason0 -
moneyunwise wrote: »I thought you could transfer into another ISA - even if you've made contributions in that tax year?The reason why this will not become a 15K ISA is because this is from previous years not this year, so even if you decided to transfer it you will still not be able to add to it.
Assuming both the old and the current year's ISA are instant access, they can both be transferred into an ISA that allows transfers in. The resultant ISA can then be topped up to what remains of the OP's £15K allowance.
OP, with the ISA rates being as miserable as they are presently, you could do much better saving up your remaining 2014-15 contribution in a few current accounts, and then put the money into the ISA you started for this year just before the end of the financial year. Of course this will only work if you haven't got some fixed term one that just opens for a short time in July for the topping up to £15K.
Other than that I don't actually really understand your question, OP - - what are your thinking of moving and why?0 -
moneyunwise wrote: »I have maxed out this years contribution as things stand now i.e. 5K. In July, I could increase this into a new 15K ISA.
If you have paid in exactly £5k then you haven't maxed out your cash ISA. You can pay in another £10k in July if your provider allows additional payments.
Or you can get 5% on your money outside an ISA.Remember the saying: if it looks too good to be true it almost certainly is.0 -
Yes, you can, if you can find an ISA that allows transfers in, and if your existing ISA doesn't have any restrictions (such as being fixed term). But you cannot have more than one ISA open for new deposits at any one point in time in the same tax year. So it you want to deposit into that 1.35% ISA, you must first transfer your 2014-15 ISA into it. Whether you can do that depends on the T&Cs of your current year's ISA. And whether it makes sense is another matter because I suspect you get more than 1.35% in your current year's ISA?
The reason the OP would not be able to make further deposits this tax year into that old ISA is not because it's from previous years but because they already made deposits into a 2014-15 ISA. If they had not made such deposits, the only other reason would be that the provider will not allow it (e.g. fixed term deposit, closed ISA issue). In all other cases it is quite possible (though not necessarily sensible) to make new deposits into cash ISAs from previous years.
Assuming both the old and the current year's ISA are instant access, they can both be transferred into an ISA that allows transfers in. The resultant ISA can then be topped up to what remains of the OP's £15K allowance.
OP, with the ISA rates being as miserable as they are presently, you could do much better saving up your remaining 2014-15 contribution in a few current accounts, and then put the money into the ISA you started for this year just before the end of the financial year. Of course this will only work if you haven't got some fixed term one that just opens for a short time in July for the topping up to £15K.
Other than that I don't actually really understand your question, OP - - what are your thinking of moving and why?0 -
Thanks for the flurry of replies.
I am restricted with my current ISA as it will not change to 15k limit but it has a good interest rate 1.79%
The other ISA I was looking at, would have a 15K limit but a lower interest rate 1.35%.
So I was trying to work out which will give me the most money by next April. Hence my problem with the basic maths of calculating interest!
So, your GCSE maths question is (which I am struggling with):
If I have £11.8k in an ISA for a year at 1.79%, how much will I have at the end?This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com0 -
The more I think about this, the dumber I feel.
I guess I just go onto a web site and use a ISA calculator to work out the interest on my ISA and the 1.35% ISA. The difference in interest figures is the minimum I need to add to justify moving.
If it sounds obvious, it is because it is... when you think about it.This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com0 -
OP, with the ISA rates being as miserable as they are presently, you could do much better saving up your remaining 2014-15 contribution in a few current accounts, and then put the money into the ISA you started for this year just before the end of the financial year.
Can you explain?
Example ISA rate is 1.35%
Example current account rate is 4% but tax is 40% so the rate drops to 2.4% (60% of 4%)
So the current account is better.
Is my maths right on this?This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com0
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