Upgrading an ISA

morpheus83uk

Hello,

I am looking at my ISA's for this year as my current one from Santander is going to drop to 1% interest. I can upgrade it to a 123 ISA saver which is 1.5% still not great but better than 1%.

I have also found that I can have a Nationwide regular saving ISA which is set at 2% with unlimited withdrawals and payment next year with the interest.

I am wondering if I upgrade my Santander ISA is this the same as opening a new account? If not I will be able to get 1.5% on the Santander ISA and also open the Nationwide ISA and save into this one and get 2%.

Its with it saying upgrade I am confused as I have an existing ISA but with the terms changing would this constitute to opening a new ISA as its a new contract of sorts?

I want to confirm before doing anything since you can only open a single new ISA each year so I don't want to be breaking the rules.

Thanks

James

badger09

morpheus83uk wrote: »

Hello,

I am looking at my ISA's for this year as my current one from Santander is going to drop to 1% interest. I can upgrade it to a 123 ISA saver which is 1.5% still not great but better than 1%.

I have also found that I can have a Nationwide regular saving ISA which is set at 2% with unlimited withdrawals and payment next year with the interest.

I am wondering if I upgrade my Santander ISA is this the same as opening a new account? If not I will be able to get 1.5% on the Santander ISA and also open the Nationwide ISA and save into this one and get 2%.

Its with it saying upgrade I am confused as I have an existing ISA but with the terms changing would this constitute to opening a new ISA as its a new contract of sorts?

I want to confirm before doing anything since you can only open a single new ISA each year so I don't want to be breaking the rules.

Thanks

James

The rule is that you can only pay new money into one cash ISA at a time. You can open as many as you wish.

Assuming you haven't paid any new money into your Santander ISA since 6th April 2015, you can do what you're suggesting.

morpheus83uk

Brilliant Thank you for the clarification I just didnt want to break the rules and have the tax man on my back!

bigfreddiel

Cash isa's are dead and buried now since you can earn £1,000 in interest tax free now, actually for this tax year it's £15,600 tax free as long as you earn less than the allowance.

To earn £1,000 at say 3% you would need to have £33,000.

The ony isa's worth having are stocks and shares held for 5 or more years in a low cost tracker(s)

Cheers fj

morpheus83uk

Yes I have them as well it was more the fact that I can have easy access to them opposed to having to go through a Financial Adviser to get the money out. Its just something I can have tax free with easy access.

jimjames

morpheus83uk wrote: »

Yes I have them as well it was more the fact that I can have easy access to them opposed to having to go through a Financial Adviser to get the money out. Its just something I can have tax free with easy access.

Tax free is irrelevant if it pays less than something that is taxed.

I'd prefer to get 5% and pay tax than 1% tax free but it all depends on your own circumstances and amounts you have to save. You can't get any easier access than a current account though.

ViolaLass

bigfreddiel wrote: »

Cash isa's are dead and buried now since you can earn £1,000 in interest tax free now,

Isn't this happening next year?

ViolaLass

morpheus83uk wrote: »

Yes I have them as well it was more the fact that I can have easy access to them opposed to having to go through a Financial Adviser to get the money out. Its just something I can have tax free with easy access.

Why would you need an FA to get your money out of an S&S ISA?

morpheus83uk

I have had them for ages and thought you needed one for a stocks and shares ISA. Is this not the case? Also when you say you can only earn £1000 tax free now is this only for cash ISAs or stocks and shares ISAs too?

Thanks

James

ViolaLass

I've never had a FA but I have a S&S ISA.

The £1000 interest tax-free is regardless of whether the money is in an ISA or not, but it isn't until the next tax year. Interest earned in ISAs is already tax-free.

morpheus83uk

So does that rule apply to stocks and shares ISAs as well? What happens if I gain more interest than £1000? Do I just lose it?