ISA Help

Thomask

Hi

I am new to ISA's. Having read Martin's guides, I have a few questions.

My scenario is as follows:

I opened an ISA on the 5th April for an amount of £15K with Virgin at a rate of 2.35% I think it was, for 5 years. I'm certain I won't need those funds before then.

It my understanding I can now open another ISA with £15,240 given the time of the year. Is that correct? If I'm certain I won't need these funds within 5 years either, shall I do the same again with Virgin? Is it best to log into my existing Virgin account to then open another?

How do ISA providers know I've only opened the correct amount of ISA's - ie if I were to try opening additional ISAs elsewhere (not suggesting I will do this, just asking)? And with the maximum amount allowed in each?

How does it work with regard to interest - if I am receiving interest into my ISA with a balance of £15K doesn't it mean interest payments mean by balance will be going above the allowed amount of £15K therefore breaking the ISA rules? Will I receive interest on the interest payments (which are due to be paid monthly)?

Are there any advantages / disadvantages in choosing monthly or annual interest payments?

I am thinking of purchasing a property soon however not in the UK. I assume the Help 2 Buy ISA is only for properties purchased in the UK?

Thanks

colsten

Thomask wrote: »

It my understanding I can now open another ISA with £15,240 given the time of the year. Is that correct? If I'm certain I won't need these funds within 5 years either, shall I do the same again with Virgin? Is it best to log into my existing Virgin account to then open another?

every year, you can use your new annual ISA allowance with whatever provider you like.

Thomask wrote: »

How do ISA providers know I've only opened the correct amount of ISA's - ie if I were to try opening additional ISAs elsewhere (not suggesting I will do this, just asking)? And with the maximum amount allowed in each?

ISA providers do not know whether you have put money into other ISAs in the same year. However, all of them report to the HMRC and the HMRC will know if you busted your allowance, and will be in touch.

Thomask wrote: »

How does it work with regard to interest - if I am receiving interest into my ISA with a balance of £15K doesn't it mean interest payments mean by balance will be going above the allowed amount of £15K therefore breaking the ISA rules? Will I receive interest on the interest payments (which are due to be paid monthly)?

Interest (or other growth) of ISAs does not count towards your allowance. All that counts is the money you deposit.

Thomask wrote: »

Are there any advantages / disadvantages in choosing monthly or annual interest payments?

in a nutshell, no, unless you need the monthly interest as spending money.

Thomask wrote: »

I am thinking of purchasing a property soon however not in the UK. I assume the Help 2 Buy ISA is only for properties purchased in the UK?

you can be certain that the UK taxman won't be interested in funding properties outside the UK.

Thomask

Thanks for your reply.

The Virgin ISA looks to be the highest payer for a 5 year term. Those with more than 1 ISA with Virgin, is it best to log into your account then start a new application for the second ISA in order to keep you accounts 'linked'?

Is it beneficial to get the new ISA started as soon as the tax year allows, than say waiting a month? I assume it's like a saving account in the sense that the sooner it's started the sooner interest accrues etc?

Does anyone know of any higher paying ones?

colsten

Thomask wrote: »

Is it beneficial to get the new ISA started as soon as the tax year allows, than say waiting a month? I assume it's like a saving account in the sense that the sooner it's started the sooner interest accrues etc?

A cash ISA is a savings account that happens to pay gross interest and has a limit on how much you can deposit.

Thomask wrote: »

Does anyone know of any higher paying ones?

S&S ISAs, current accounts, regular savings accounts, Pensioner Bonds - - - they all can pay more but it all depends on your circumstances.

Thomask

So with the £15,240 for the current tax year ISA allowance do I just add this amount to my existing ISA?

Thanks

Thomask

Also, if I leave living in the UK to live elsewhere, can my ISA's continue?

eskbanker

Thomask wrote: »

So with the £15,240 for the current tax year ISA allowance do I just add this amount to my existing ISA?

You can do if you wish (provided you're still within the limited initial period for making deposits into a fixed rate product), or you can pay into a different ISA if you wish, or, as above, there are numerous other products out there that may provide better returns.

Thomask wrote: »

Also, if I leave living in the UK to live elsewhere, can my ISA's continue?

Any you already have can continue but you can't open new ones or make further contributions to existing ones, see https://www.gov.uk/individual-savings-accounts/if-you-move-abroad-or-die

badger09

Thomask wrote: »

Hi



I opened an ISA on the 5th April for an amount of £15K with Virgin at a rate of 2.35% I think it was, for 5 years. I'm certain I won't need those funds before then.

Can you please clarify. Are you certain your £15k was credited to your Virgin ISA on 5th April?

Or did you apply on 5th?

I ask, because if the £15k was credited on 6th April, or later, then it will mean you have used £15k of your 2015/16 £15240 ISA allowance.

Thomask

Yes, I made it in time for last financial year's ISA (£15K). Applied and the funds were received by 22:00 on the 5/4 (their deadline).