How do Cash ISAs work?

Malibusmash

Can someone help me please?

I have a cash ISA in a two year fixed term which ends on 30th September 2015, with a balance of £15,000.
Come April 2015, I would like to invest another £15,000 in another ISA for this tax year (all in all £30,000).

What I don't understand is; if I invest the new amount in a new ISA in April, what will happen to the current ISA when the term ends in September? (I know I'm only allowed to invest one lot of £15k per year so presumably I can't move it elsewhere into another ISA?).

Hope I've made sense of this question.

Linton

You can move old ISAs. The restrictions on putting money into an ISA only affects new money - ie money coming from outside the ISA world.

Note that if you want to transfer an ISA find an ISA to transfer into first and they will organise things. Do not attempt to do the transfer yourself. Once you take money as cash outside an ISA it would then become new money if you put it back in.

Malibusmash

Thanks so much for your reply. Just to clarify, that means I can open a new ISA with the new money in April (with my 2015 allowance) and come September, I can also move the existing £15k to another new ISA, without it affecting any allowances.

bowlhead99

Yes. The limit of £15k is only for new subscriptions in a tax year, literally putting a maximum £15k new money into a tax wrapper from outside one.

If you are just changing service provider or product for an existing ISA, nobody cares.

It only becomes a problem if you manually took money out of your old product back to your own bank account and then wanted to put it into something new - it would count as a new subscription and you wouldn't have space.

Cornucopia

Malibusmash wrote: »

Thanks so much for your reply. Just to clarify, that means I can open a new ISA with the new money in April (with my 2015 allowance) and come September, I can also move the existing £15k to another new ISA, without it affecting any allowances.

It won't affect the allowances, but you need to check the transfer arrangements with the new provider, now, so that you are prepared come September.

A fixed-term ISA will not close at the end of the term, it just reverts to a "normal" ISA, with (in all likelihood) a disappointing rate of interest.

Malibusmash

Thanks everyone, you've all been so helpful. Much appreciated.

ColdIron

If you opened your existing 2 year fixed ISA on 30th September 2013 (2013/2014 tax year) you don't need to wait until 6th April this year to subscribe to a new ISA, you could use your 2014/2015 allowance now

Eco_Miser

Cornucopia wrote: »

A fixed-term ISA will not close at the end of the term, it just reverts to a "normal" ISA, with (in all likelihood) a disappointing rate of interest.

Or worse, it defaults to rolling over into another fixed-term ISA with a disappointing rate of interest.

mad_rich

ColdIron wrote: »

If you opened your existing 2 year fixed ISA on 30th September 2013 (2013/2014 tax year) you don't need to wait until 6th April this year to subscribe to a new ISA, you could use your 2014/2015 allowance now

Well spotted!

"could" = probably should open one before the 2014-15 tax year has finished. And then the OP will have a fresh allowance in April.