Should I change ISA?

westernpromise

monki_man wrote:

do you guys think its worth switch to First direct ISa from abbey potal isa? switching back to abbey after 8mths, all the hassle worth it?

Wondering the same thing as I have 6k plus interest (2 years' worth) in abbey. The FD terms are unintelligible. AIUI you can only transfer in 3k and interest, but I have no idea whether you can split an ISA in half in this way.

Reaper

westernpromise wrote:

I have no idea whether you can split an ISA in half in this way.

I think lots of people have been wondering this so I phoned up my ISA provider (Intelligent Finance) and asked. Apparently you can do this, rather to my surprise.

It is vital when you fill in the transfer forms that you say which tax year you want to move.

I asked about moving this year's ISA plus interest. He said the system could not split out the interest by year but their admin people would sit down with a calculator and work it out if asked. I think I'll just keep things simple and shift £3000 though, then top it up with next year's allowance after April.

monki_man

I only started having an isa this tax year so I'll be alright as its my whole isa savings anyways, but yes thats cool you can split it!

isasmurf

The rules on ISA transfers are this:

You must move current year's deposits in full. They must remain within the same type (i.e. Mini/Maxi) wrapper.

Previous year's deposits can be be split. You can move between types of ISA wrapper (i.e. Maxi to Mini or vice versa) but you cannot move between investment types (i.e. Cash must remain as Cash)

An example
Martin deposts £3,000 in the Cash component of a Maxi ISA with Bank Rip-off in 2003/04. He realises he can get a better deal at Bank MSE, but wants to keep some money in Bank Rip-Off. Bank MSE are only offering a Mini Cash ISA so he transfers £2,000 of his ISA to the Mini Cash ISA with Bank MSE, leaving £1,000 with Bank Rip-off.

westernpromise

isasmurf wrote:

The rules on ISA transfers are this:

You must move current year's deposits in full.

Doesn't the above contradict the following?

Bank MSE are only offering a Mini Cash ISA so he transfers £2,000 of his ISA to the Mini Cash ISA with Bank MSE, leaving £1,000 with Bank Rip-off.

Paul_Varjak

westernpromise:

It is the current year's ISA that cannot be split - you can split previous years' ISAs - that is exactly what isasmurf is demonstrating!

westernpromise

Paul_Varjak wrote:

westernpromise:

It is the current year's ISA that cannot be split - you can split previous years' ISAs - that is exactly what isasmurf is demonstrating!

Oh, I see. So presumably you're best off transferring the oldest ISA to a higher rate, because it will take all its interest with it? Or is it just the £3k that you can shift?