I closed my Cash ISA - can I open new one?

robmachete

I know this question has been asked before, but I couldn't find a thread that matched my circumstances.

Yes, I was a complete ISA noob, but now I know about transfers and such.

I opened my first ever ISA with Virgin Money in March, simply in order to try and win a prize. I made an initial deposit of £5 and no further deposits at all.

I closed the account a few days ago, after the end of the prize promotion (I didn't win).

The ISA rules say that I can't open a new Cash ISA during the current tax year if I've "subscribed" to and closed another Cash ISA in the same tax year.

However, it seems to me that "subscribed" refers to making deposits, which I haven't done during the current tax year.

So, I think that I am allowed to open a new Cash ISA.

Am I wrong?

bowlhead99

Yes, a current year subscription is putting new money into an ISA in the current tax year. The money you withdrew on closure was 2016/17 money. So, you have not used any of your 2017/18 allowance of £20k and can subscribe freely to a cash ISA (or S&S ISA, Lifetime ISA, IF ISA).

Depending on the amounts involved you might find much better rates than cash ISA accounts. As an example a cash ISA account might pay 1% if you are lucky which is £10 for a year on a £1000 deposit. Unless you are using a fixed term ISA account where your money's locked up, or a 'regular saver' ISA like the new one from Ford Money at 4% with a pentalty for withdrawal. Whereas some other non-ISA accounts (like Nationwide's current account or regular saver account) pay 5% which is more like £50 for the year and no penalty if you choose to take the money out earlier.

Obviously if the money we are talking about is just the fiver you mentioned, it's not worth shopping around very much.

robmachete

Thanks very much for your quick reply - it's a relief to hear that my assumption was correct, on this rare occasion.

I wouldn't normally be looking to open a new Cash ISA, but I received MSE's Money Tips email this morning and it tells of a magical 4% ISA with Ford. I can now apply for this - and I shall deposit more than a fiver.

Thanks again.