Can I open new ISA this tax yr?

w1ggins

Hi. I have deposited £5940 in my Barclays Cash ISA which dropped to 1.49% AER this tax year.
However I have found a Cash ISA with another provider which has a better interest rate - Tesco Cash ISA at 1.65% AER.


Despite having deposited the £5940 this tax year, can I still open the Tesco Cash ISA which accepts transfers in?


>>I have another question related to the following information provided by Tesco Bank: "If you have a Tesco Bank Fixed Rate Cash ISA you can only make transfers to it within 30 days of account opening. Your existing Cash ISA provider may have restrictions or charge you for transferring money out of your existing Cash ISA."


>>When they say "... you can only make transfers to it within 30 days of account opening." do they mean specifically the money that already exists within the old Cash ISA or do they mean any money you want to deposit i.e. I won't be able to deposit any more money this tax year after the 30 days of opening.


I'm sure you read this sometimes but I do apologise if my questions seem dense.


Regards.

innovate

The ISA rules allow you to transfer your current year's ISA as long as the deposits you made this year will be transferred in their entirety.

Not sure what sort of ISA you are planning to transfer I to, but if it is a fixed rate one, you will only be able to add additional cash for a very short time.

You should use the formal ISA transfer process for any transfer.

I take it you are aware that you can earn a lot more interest for £5,940 (and more) outside an ISA.

Consumerist

w1ggins wrote: »

>>When they say "... you can only make transfers to it within 30 days of account opening." do they mean specifically the money that already exists within the old Cash ISA or do they mean any money you want to deposit i.e. I won't be able to deposit any more money this tax year after the 30 days of opening.

Fixed-rate ISAs normally have a limited time within which you must make your deposits, whether they are transfers-in or new cash. So after thirty days you will not be able to add to the ISA either by cash or by transfer-in. Any unused allowance will normally be lost.

This year is an exception in some cases because, unusually, the ISA allowance is increasing to STRIKE]£50K[/STRIKE £15K [Thanks AB] from 1 July and some banks are allowing a further period in July to add more cash up to the new allowance. You'll need to check this with Tesco.

Archi_Bald

Consumerist wrote: »

This year is an exception in some cases because, unusually, the ISA allowance is increasing to £50K from 1 July

You got a bit carried away there - it will be £15K only.

Consumerist

Oops! Don't know how that happened - sounds similar in the head, perhaps.

Thanks. I've amended the post.

w1ggins

Thanks for your feedback everyone. I checked with Tesco's online FAQ and there is nothing about NISAs or being able to deposit after 30 days of account opening. The only info I could get is the following:


Question:



How many deposits can I make to my Fixed Rate Cash ISA?



Answer:



You can make as many deposits as you like within the first 30 days from account opening up to the annual allowance.


Sorry about the font changes I did a copy paste job and having some issues re-formatting.


Is my best bet going forward to open the NISA in a few days time, so that the 30 day period will extend into July and then I can make the additional deposit?


>>Also Innovate said "I take it you are aware that you can earn a lot more interest for £5,940 (and more) outside an ISA."
I'm afraid I'm only aware of ISAs and taxable savings accounts, any advice on other forms of saving you've found which are better much appreciated.


Regards.

Consumerist

w1ggins wrote: »

. . . Also Innovate said "I take it you are aware that you can earn a lot more interest for £5,940 (and more) outside an ISA."
I'm afraid I'm only aware of ISAs and taxable savings accounts, any advice on other forms of saving you've found which are better much appreciated.

Current accounts which pay in-credit interest are providing much better net returns for basic-rate taxpayers than ISAs currently do.

Some to consider are :-

TSB Current Plus account pays 5% AER on balances up to £2,000. You may be able to open two of these

Club Lloyds current account pays 4% AER on credit balances up to £5,000

Santander 123 current account pays tiered interest up to 3% AER on credit balaces £3k - £20K

The drawback with these accounts is that you need to pay in a minimum amount each month (£500 pm - £1,500 pm according to account) and, except for the TSB account, you need to transfer a minimum of 2 direct debits to the account.