Top Cash ISAs Discussion Area

tightwadman

I would like to warn everyone one here to beware Fixed Rate ISAs which are becoming more widespread and are a relatively new form of ISA - you absolutely MUST read the small print because they are not all the same.

Good - LLoyds have a fixed rate ISA paying 3.15% for 2 years and you can transfer in BUT the really important point is that you CAN add your funds in the second year. Read the small print as not all will allow it.

Bad - Saga Savings have a three year fixed rate at 4.00% which sounds good but do the homework, read between the lines and you may be shocked to find you cannot add any funds in years two and three. Also there is a penalty if you remove said funds.

I have a 2 year 3.6% ISA with Saga I started 12 months ago and have just been told I cannot add funds in my second year. No information to this effect was provided to me before they accepted my money. This means I will now have to open a new ISA elsewhere and therefore have two completely separate ISA funds until I can re-unite them.

A complaint to the FSA is in the pipeline and needless to say I wont be investing with Saga again.

NickHayman

Another poster (who I believe works for Santander) has said on this forum that you have 30 days in which to fund Santander ISAs before they automatically close, so opening now and funding after 6th April (but within 30 days of opening) would be fine.


Re this post, I've just opened a Santander Flexible Cash ISA online and one of the conditions is that:

I have not and will not open another Cash ISA in the current financial year (Not a direct quote)

Given I'd like to pay in just under the maximum to the Santander ISA and use the remaining few quid to set up a second new ISA, this time to transfer previous ISAs into rather than put new money in, where does this leave me?

Some older posts seem to suggest this is okay...

Many thanks

rb10

tightwadman wrote: »

I would like to warn everyone one here to beware Fixed Rate ISAs which are becoming more widespread and are a relatively new form of ISA - you absolutely MUST read the small print because they are not all the same.

Good - LLoyds have a fixed rate ISA paying 3.15% for 2 years and you can transfer in BUT the really important point is that you CAN add your funds in the second year. Read the small print as not all will allow it.

Bad - Saga Savings have a three year fixed rate at 4.00% which sounds good but do the homework, read between the lines and you may be shocked to find you cannot add any funds in years two and three. Also there is a penalty if you remove said funds.

I have a 2 year 3.6% ISA with Saga I started 12 months ago and have just been told I cannot add funds in my second year. No information to this effect was provided to me before they accepted my money. This means I will now have to open a new ISA elsewhere and therefore have two completely separate ISA funds until I can re-unite them.

A complaint to the FSA is in the pipeline and needless to say I wont be investing with Saga again.

And? Just open a second ISA, and then merge them together once the fixed rate periods have finished. It is not difficult or particularly time-consuming to do.

The vast majority of fixed rate accounts do not allow you to add funds during the fixed rate period.

NickHayman wrote: »

Another poster (who I believe works for Santander) has said on this forum that you have 30 days in which to fund Santander ISAs before they automatically close, so opening now and funding after 6th April (but within 30 days of opening) would be fine.


Re this post, I've just opened a Santander Flexible Cash ISA online and one of the conditions is that:

I have not and will not open another Cash ISA in the current financial year (Not a direct quote)

Given I'd like to pay in just under the maximum to the Santander ISA and use the remaining few quid to set up a second new ISA, this time to transfer previous ISAs into rather than put new money in, where does this leave me?

Some older posts seem to suggest this is okay...

Many thanks

Your entire 2011/12 allowance must sit in the same account - so put the whole £5340 into the Santander ISA.

You can then open your second ISA (with a zero balance, pending a transfer-in). The transferred funds will then form the opening deposit.

None of this will break the rules.

matty50

Can anyone explain the difference between an isa that 'tracks the base rate' and one that has a 'variable' rate? I suppose the first is self explanatory but I dont really undestand the 2nd!!

gallygirl

matty50 wrote: »

Can anyone explain the difference between an isa that 'tracks the base rate' and one that has a 'variable' rate? I suppose the first is self explanatory but I dont really undestand the 2nd!!

One that tracks the base rate does just that. The variable one means it may go up or down but not guaranteed. What will probably happen is base rate will go up 0.25% and it will go up 0.15%, or maybe that's just me being cynical

tashalove

Hi all

Sorry if this has already been covered but is it possible to open an ISA for the new tax year now when I have recently contributed to the 2010/2011 tax year?

I am asking this because there seems to be a deadline for the application for Santander ISA @ 3.3% and Ill be gutted if I miss it. I read a few posts back that the account doesn't need to be funded immediately, can someone in a similar scenario be able to confirm this?

In the online application form it asks whether you have funded the current tax year so in my case this would be yes? Does that mean I can't apply?

I don't want to be hunted down by HMRC just because I was being too ambitious with my ISAs and making a regrettable mistake

Lokolo_2

tashalove wrote: »

Hi all

Sorry if this has already been covered but is it possible to open an ISA for the new tax year now when I have recently contributed to the 2010/2011 tax year?

Well Yes you can Open an ISA with the intention of funding it next tax year, just don't make a deposit until April 6th.

tashalove wrote: »

I am asking this because there seems to be a deadline for the application for Santander ISA @ 3.3% and Ill be gutted if I miss it. I read a few posts back that the account doesn't need to be funded immediately, can someone in a similar scenario be able to confirm this?

Yes, many people seem to think that the Santander ISA will drop its rate when we hit the new tax year, but that's not confirmed!
Yes you can open a Santander ISA without making a deposit until the new tax year.

tashalove wrote: »

In the online application form it asks whether you have funded the current tax year so in my case this would be yes? Does that mean I can't apply?

No, it is just giving you a warning that if you have already funded an ISA this tax year then you cannot make a deposit into the Santander one until the next tax year.

tashalove wrote: »

I don't want to be hunted down by HMRC just because I was being too ambitious with my ISAs and making a regrettable mistake

No, don't worry, it is all above board so long as you don't make a deposit into the ISA until the next tax year, you can OPEN as many ISA's as you like, it is the "funding" which counts towards your ISA allowance and ISA rules.

rjhempel

Hi there,

Having read some of the previous posts, I am still not clear if I can do the following.

I have an ISA with Santander with I used all allowance for this year, rate has drop dramatically and there isn't a chance I'll get the higher rate.

Is is possible for me to open an ISA with Halifax transferring a % of what is in my current ISA, then close the original Satander ISA, using the % left in the current ISA then to open a new Santander ISA which doesn't allow transfers.

Will I be funding more than one ISA doing this, by transferring a %, or do I have no choice but to move the whole lot from Santander to Halifax in the new tax year?

I am hoping rather low hopes, I can do the split of it.

Thanks
Russell

le_loup

As you suspected ... no.

Lokolo_2

rjhempel wrote: »

Is is possible for me to open an ISA with Halifax transferring a % of what is in my current ISA, then close the original Satander ISA, using the % left in the current ISA then to open a new Santander ISA which doesn't allow transfers.

No, you cannot part transfer your current year's ISA, you must transfer it in full. Alternatively just wait until April 6th when we hit the new tax year and you'll be able to make part transfers.

I would NOT recommend what you suggested about putting some into Halifax and then effectively withdrawing and putting some into Santander. Any money you withdraw from an ISA will lose it's tax-free wrapper and when you deposit it into another ISA it WILL count towards your annual ISA allowance, so you would only be able to do it from the next tax year anyway.

rjhempel wrote: »

Will I be funding more than one ISA doing this, by transferring a %, or do I have no choice but to move the whole lot from Santander to Halifax in the new tax year?

I am hoping rather low hopes, I can do the split of it.

Thanks
Russell

ISA transfers do NOT count towards your annual ISA limit, however as I said you cannot transfer the current year's ISA in part.

What you can do is transfer your Santander ISA to Halifax, AND when we hit the new tax year you can open a new ISA with Santander and deposit up to the 11/12 ISA allowance of £5340 (you can open the Santander ISA now but you must not deposit anything until April 6th)