Two Cash ISA;s

Parsimonious_Pete

I opened a new cash ISA in July 2018. (2 year fixed rate).
I now wish to open a second Cash ISA (Easy Access) in the same financial year.
The combined contributions are within the max £20,000 per financial year.
Is that within the rules?

ValiantSon

Parsimonious_Pete wrote: »

I opened a new cash ISA in July 2018. (2 year fixed rate).
I now wish to open a second Cash ISA (Easy Access) in the same financial year.
The combined contributions are within the max £20,000 per financial year.
Is that within the rules?

I assume that you mean July 2017.

The answer is no. You can only pay into one ISA within any financial year. You can open a new ISA after 5th April and pay into that, but you won't be able to put any more into the one you opened in July.

Parsimonious_Pete

Grateful thanks for your prompt reply.
Yes, of course I meant July 2017.
Could I open new a Stocks and Shares this year, and then transfer it to a cash Ia after April 5th. ?
My aim s to make the most I can of my ISA allowance 2017- 2018.

Keep_pedalling

Parsimonious_Pete wrote: »

Grateful thanks for your prompt reply.
Yes, of course I meant July 2017.
Could I open new a Stocks and Shares this year, and then transfer it to a cash Ia after April 5th. ?
My aim s to make the most I can of my ISA allowance 2017- 2018.

Why would you want to do that? cash ISAs are poor value and have not been worth bothering with for years.if this is for long term savings go for S&Ss ISA if shorter term you can do better with your cash outside ISAs even if you do have to pay tax on it.

ValiantSon

Parsimonious_Pete wrote: »

Grateful thanks for your prompt reply.
Yes, of course I meant July 2017.
Could I open new a Stocks and Shares this year, and then transfer it to a cash Ia after April 5th. ?
My aim s to make the most I can of my ISA allowance 2017- 2018.

Yes, you could, as long as you didn't contribute more than the total £20,000.

If you open an S&S ISA you wouldn't need to actually invest the money, either. Most (if not all) S&S ISA providers allow you to hold cash in the account, waiting to invest. So you could open an S&S ISA and transfer in the money you want to by 5th April, but not buy any investments with it and then, after 5th April, open a new cash ISA and apply to transfer the S&S ISA in. If you do this, just check what exit costs might be on the S&S ISA, and that the new cash ISA allows transfers in (not all do).

ValiantSon

Keep_pedalling wrote: »

Why would you want to do that? cash ISAs are poor value and have not been worth bothering with for years.if this is for long term savings go for S&Ss ISA if shorter term you can do better with your cash outside ISAs even if you do have to pay tax on it.

Generally cash ISAs are poor performers these days due to low rates and the savings allowance, but they can offer some benefit to people who wish to keep substantial sums in cash and have exceeded the savings allowance (particularly likely to affect higher rate tax payers).

You and I might be happy to take investment risk, but not everyone is. The OP could lack confidence in investing due to not knowing much about it. Taking the course that they suggest would give them a larger tax free pot to move into an S&S ISA at a later date once they had learned more about investing and felt confident to do so. Or they may just want to stay in cash.

OP, if you aren't looking at potentially breaching the savings allowance, and you don't have significant cash reserves, e.g. £50,000 - £60,000 +, then it might be worth comparing the interest rate on ISAs with savings accounts and interest paying current accounts. However, if S&S ISAs are something that you might conceivably start using to invest with in the future then saving your money in cash ISAs now will give you a bigger pot to start tax free investing with when you decide to do so (because you will have the total of your ISA to invest plus the allowance for that year).

dqnet

Hi, just building up on this question slightly.

I have a 120 day notice Cash ISA which I would like to transfer to a Fixed Term Deposit ISA for the higher rate but unfortunately if I do a direct transfer I will lose 4 months interest (rules of the account).
The provider suggested I open an easy access ISA and start a withdrawal request for the funds to go to it and after the 4 months open the fixed rate saver ISA I want and transfer the money into that.

My question is, I am allowed to open this easy access ISA this tax year despite already having the notice account? Furthermore, when I do transfer the money into it after a few months, can I open another ISA sometime in June (after the 4 months) and transfer my full balance whilst retaining my £20k allowance?

Thanks

xylophone

With which provider do you have the fixed rate ISA?

Certain ISA providers permit you to spread the annual subscription between their ISA products.

Example

https://www.nationwide.co.uk/products/isas/isas-explained#tab:ISAsexplained


What do I need to know?
You can open a cash ISA if you are aged 16 or over and you are resident in the UK
Each tax year, you can only choose one provider to have cash ISAs with
You can split your allowance between Nationwide's full range of cash ISA products

jimjames

ValiantSon wrote: »

Yes, you could, as long as you didn't contribute more than the total £20,000.

If you open an S&S ISA you wouldn't need to actually invest the money, either. Most (if not all) S&S ISA providers allow you to hold cash in the account, waiting to invest.

Problem is that you're then reducing the already poor cash ISA rate you'd get by even more.

dqnet

xylophone wrote: »

With which provider do you have the fixed rate ISA?

Certain ISA providers permit you to spread the annual subscription between their ISA products.

Example

https://www.nationwide.co.uk/products/isas/isas-explained#tab:ISAsexplained


What do I need to know?
You can open a cash ISA if you are aged 16 or over and you are resident in the UK
Each tax year, you can only choose one provider to have cash ISAs with
You can split your allowance between Nationwide's full range of cash ISA products

Al Rayan - 120 day Notice Cash ISA (I want to leave them and go into there 2 year fixed at 1.7% because I can always just pull my money out anytime regardless [HMRC law thing] with a smaller forfeit which is 90 days and not 120 while still getting a higher rate)