New ISA Query

gininteacups

Hi there, this is a quick ISA question to any expert out there:

Background
Having stuck the maximum £5,940 in to my cash ISA at the beginning of the 14/15 fiscal year, I’ve now come to top it up to £15k in line with the new rules.

However, I notice that my ISA with the Cheshire BS has a 2% bonus ending on 31st July. The full interest rate is 2.5% so I figure it’ll simply drop down to a paltry 0.5%!

My Question
Can I set up and transfer the full £17k balance across to a new ISA – one with a better rate - despite having paid some monies into an ISA already within the current year or am I stuck where I am until next April?

Thanks in advance.
Gin

colsten

Not sure I have properly understood your post because I can hardly read the tiny font, but if you are asking whether you can transfer an ISA into which you deposited this FY, and then still make further deposits to use the remainder of your allowance for the FY: The answer is yes, as long as you use the formal ISA transfer procedure, transfer the current year's contribution in full, and as long as your new provider allows additional deposits.

This rule has always applied to ISAs, and continues to apply.

greenglide

Yes you can, but only if the ISA you are transferring to accepts transfers in without any "new money" going into the account. You cannot put any new money in as part of the transfer, most ISAs expect to to open the account with new money and may then accept a transfer in, you cannot meet this.

Whatever you do ensure that you do not break the rules about ISAs - it is not worth the risk at todays interest rates.

gininteacups

Thanks both, to clarify, I have approx £17k inthe account but this doesn’t include the £9,060 I want to add to bring me up to£15k for this year (I refrained from adding this pending the answer to this question).

I think, you are saying that I can, indeed,transfer to a new account at a new/better rate (where I will also add the £9k).

I hope that I have understood this correctly –thanks again.

Gin

colsten

greenglide wrote: »

Yes you can, but only if the ISA you are transferring to accepts transfers in without any "new money" going into the account. You cannot put any new money in as part of the transfer, most ISAs expect to to open the account with new money and may then accept a transfer in, you cannot meet this.

I can read this bit, and confidently say that this is not true. You can transfer, and as soon as the transfer is complete, you can add more money

• unless you have already used up your allowance for the FY, and/or
• unless you have chosen a fixed term ISA for which the deposit window (some 2-4 weeks from opening, usually) has expired

greenglide wrote: »

Whatever you do ensure that you do not break the rules about ISAs - it is not worth the risk at todays interest rates.

You should never break ISA rules (that's the rules HMRC publish), regardless of the interest rates.

The HMRC ISA FAQ might help: http://www.hmrc.gov.uk/isa/faqs.htm

jimjames

No mention so far but you can get far better rates on current accounts than ISAs.

Current accounts pay 5% which no ISA beats even taking tax into account.

colsten

gininteacups wrote: »

Thanks both, to clarify, I have approx £17k inthe account but this doesn’t include the £9,060 I want to add to bring me up to£15k for this year (I refrained from adding this pending the answer to this question).
I think, you are saying that I can, indeed,transfer to a new account at a new/better rate (where I will also add the £9k).

Yes you can do that. As jimjames says, however, you can get better interest for your £9,060 in current accounts, at least until next March. http://www.moneysavingexpert.com/savings/savings-loophole