ISA transfer question

Domino2910

Hi all

Sorry if a similar question has been asked before or if it's a bit stupid, I'm getting myself very confused at the moment.

I have a received a letter from my building society saying that they're cutting my interest rate. So I thought why not shop around and see if I can get a better deal. The only problem is that I have already paid into my ISA for this financial year, and already had savings in it from previous financial years that I have added to.

I had around 12.5k in there from before this financial year and have added £700 in after April 1st 2016. I now realise I should have opened a fresh ISA but knew little about this before!

So if I wanted to transfer all this money to another ISA for a better rate would all of the 13ish thousand count towards this years allowance as it is all in the same account, Or just the 700 paid in from this tax year?

Thanks in advance for your help.

Dom

Plus

Just the £700 (assuming you added it on or after April 6th). You'd have to transfer all of the £700 together but the rest is free to do what you like with.

hybernia

Seems to me that both the OP and I have received same letter. Mine's from Nationwide, saying "Your Instant ISA Saver interest rate will be reducing soon" -- that is, dropping from the current 1.5% AER to 1.0% from 1st June.

Being a bit thick about stuff like this, I'd taken it into my woolly head that I was stuck in some sort of contract with Nationwide over this ISA (originally with the former Dunfermline Building Soc) and had to keep it until some fixed term or other expired. But it now seems, there's no fixed term at all. I can go elsewhere.

The one recommended here on MSE that best suits my purposes is Yorkshire Building Society's Triple Access ISA. It doesn't allow the always-available access which Nationwide does, but at 1.35% it pays out more.

I'd really be grateful if someone wiser than I am could help me with the following:

1) I have £12,300 in this Nationwide ISA. I have not added anything to it in this financial year. Yorkshire BS says I can transfer in to it. But I must "not have already subscribed to a cash ISA" in this current year. I'm assuming then that "subscribing to" / "adding cash" to an ISA means one and the same thing? So I would be OK to transfer in my existing Nationwide ISA?

2) Yorkshire's, like Nationwide's, is a variable rate. Nationwide has just varied its rate downwards so presumably, Yorkshire can do likewise whenever it chooses. For the sake of 0.35%, does it seem sensible to go from an easy access ISA to a restricted access ISA? The difference in interest received (as things stand) between 1.0% and 1.35% is a mere £43. If Yorkshire BS does vary its rate, then that £43 could vanish altogether. And I'd have lost the easy access facility for no benefit at all.

Sorry if I'm asking stuff to which others might respond, go get your own crystal ball!

t0rt0ise

I've got the same letter and the same problem. The Yorkshire account doesn't seem to be an online account. That's a problem for me. The next best seems to be the Virgin ISA at 1.31%. I may go for that, it's easy to open online. If the rate drops I'll move it again.


Edit to add: The Punjab Bank has a good ISA. Will be going down to 1.45% from end April apparently, no limits on withdrawals. Only drawback is it has to be opened in a branch but there's one near me.. LOL but then you can view it online etc.

https://www.pnbint.com/cash_isa.aspx

https://www.pnbint.com/NewContact.aspx

hybernia

Thanks tortoise! Hadn't realised about the YBS's non-online policy. That's no good to me, either.

It's almost getting to the point that one wonders (given the latest changes to taxation and ISA operation) if it's even worth the bother of finding an ISA provider. The small print variations seem endless: can't transfer / can transfer / can only transfer this year's 'subscription' /can only transfer that which isn't this year's 'subscription' / can't have unlimited access / can have unlimited access / can't do stuff online / can do it online / have to live within walking distance of ISA head office postcode / can live anywhere you want but, er, forget online funding and withdrawal, you have to come into some distant branch the getting-there cost of which will exceed the measly amount you've earned in a year's interest anyway.

As I don't have the maximum in my ISA, I'm beginning to wonder if I should just move it into some kind of straightforward savings account and forget all the b.s. from all the different BS's. . .

jimjames

If you only have £12k then why bother with a cash ISA at all when you can get vastly better rates elsewhere.

hybernia

jimjames wrote: »

If you only have £12k then why bother with a cash ISA at all when you can get vastly better rates elsewhere.

The only savings alternative suitable for my individual needs that I've been able to find is the Coventry Building Society's at 1.3%.

As my Nationwide ISA is going down to 1.0%, and Coventry's 1.3% could just as easily go the same way sooner rather than later, the hassle of migrating it for a mere 0.3 of a per cent makes no sense.

If you do know of some "vastly better" savings products out there which offer easy access and without me needing to move my current account to the new provider, I'd be delighted to hear of it. As, I think would many reading this thread. Thanks!

colsten

hybernia wrote: »

If you do know of some "vastly better" savings products out there which offer easy access and without me needing to move my current account to the new provider, I'd be delighted to hear of it.

It's no secret that current accounts and regular saver accounts have been the best interest payers for a few years now. For £12K, you should easily be able to get over 4% AER, probably all tax free.

hybernia

Thanks, colsten. Yes, I'm aware of current accounts / regular saver offers; I even looked at the 1st Direct saver a short time ago but then discovered it has to be linked to a current account from the same provider.

I'll pass then, but again, thanks to you and to jimjames; I really don't want the hassle of leaving a bank I've been with for 35 years nor the alternative of drip-feeding from my bank account to another which operates only for 12 months. I guess I'm one of those people who needs to have things simple!

colsten

You do not need to leave your existing bank, or do anything at all with your existing current account. You just open any prequisite current account(s), in addition to the one you already have. Plenty of people on here have umpteen current accounts (I have over two dozen myself).

t0rt0ise

I can't be bothered doing the current account thing with moving money in and out and changing direct debits etc. So I just opened a Virgin ISA and am posting off a transfer form tonight, so Nationwide account will close. It was easy enough to open online and if the rate goes down I'll simply move it again to somewhere better if there is any.