ISA Confusion

heyjim

Hi all,

Last year I opened an ISA and managed to save around 12k.

Now the new tax year has started, should I open a new ISA and start paying into that and leave the current 12k where it is?

Also can I add to that 12k or will that count towards this years allowance?

Thanks

masonic

You could open a new ISA and start paying into it. You could not also contribute to the old ISA as your cash ISA contributions for any one tax year must be held in one place. Are you not tempted by the better rates available on non-ISA accounts?

heyjim

masonic wrote: »

You could not also contribute to the old ISA as your cash ISA contributions for any one tax year must be held in one place.

Thanks! The the main thing I wanted to clear up

masonic wrote: »

Are you not tempted by the better rates available on non-ISA accounts?

I suppose if the rates beats the tax savings on the interest then yeah! I'll have a look now

masonic

heyjim wrote: »

I suppose if the rates beats the tax savings on the interest then yeah! I'll have a look now

Remember that accounts that pay interest annually at the end of an account year will pay out in the next tax year, where you are likely to receive the interest tax free as announced in the budget recently. So regular savers and fixed rate accounts are likely to benefit from this. There are also high interest current accounts paying from 3-5% before tax.

badger09

Even if they pay interest monthly, interest of 5% after tax is still way more than interest of say 1.5% (typical instant access cash ISA rate available now)