Top Cash ISAs Discussion Area

Consumerist

kelpie35 wrote: »

I am awaiting a transfer into a new isa. Would I be able to put some money into this account just now or do I have to wait till the money is transfered. I asked for the transfer to be done on the 31/03/12

Since you have a new 2012/13 allowance from 6 April, you can contribute to the new ISA account as soon as the new manager has created the account and given you the account details.

Lungboy

Consumerist wrote: »

It is true that you can pay into only one ISA in a tax year but that ISA can be transfered around to different managers throughout the year. If you transfer your ISA then it is still the same ISA but it will just be managed by a different manager.

Ok, this is the bit i wasn't getting. I assumed that when you transfer the ISA it goes into a new one, with new interest rates and so on. I didn't realise that it counts as the same ISA, even thought it's now at a different bank with different rates etc. Thanks for the help.

pipo

Silly question, but can anyone tell me if the interest at the year end going to be higher if you put in the full £5640 at the start as opposed to, say, depositing 12 monthly deposits of £470?

KTF

Yes as its compounded.

thenudeone

KTF wrote: »

Yes as its compounded.

The answer is Yes - But it's nothing to do with compounding.

It's because you only get interest on money that's invested in the bank/BS (for each night). You don't get a full year's interest on the balance at the end of the year unless the balance was in the account for the full year.

If you have a balance £470 for 1 month, £940 for 1 month etc.; then the interest at 3% will be around:
1/12 x £470 x 3% + 1/12 x £940 x 3% + .etc.....
which is just over half of the interest on £5640 for 12 months which is £5640 x 3%

Compounding is a completely different issue which means that once interest is added to the account, it starts to earn interest itself. It's effect can usually be ignored as long as you use the AER to compare savings and you're only looking at a 1 year timescale, because the official AER is always calculated including the effect of compounding (if interest is paid monthly) and banks/BSs usually keep the AER the same for both monthly and annual interest versions of the same account (which means the gross rates are slightly different). Here's an example:http://www.teachersbs.co.uk/savings/fixed-rate-bonds/fixed-rate-bond-119.aspx

Consumerist

pipo wrote: »

Silly question, but can anyone tell me if the interest at the year end going to be higher if you put in the full £5640 at the start as opposed to, say, depositing 12 monthly deposits of £470?

If you pay in your £470 at regular intervals, the interest paid at the end of the year will be about half the AER because the average balance during the year will have been about half the amount at the end.

You can get a more accurate figure by using the <MSE cash ISA calculator> with £0 to start then £470 per month for 12 months. Enter the interest rate your ISA is receiving.

From the ISA calculator, at 3% the ISA would be worth £5,731.24 at the end of the year after 12 payments of £470 whereas depositing £5,640 at the start would be worth £5,809.20 at the year's end.

newuser78

I am thinking of transferring my old ISA containing 9K to Santander 1 year Fixed Rate - linky - basically:

1. Guaranteed rate for 1 year.
2. Deposit from £2,500 up to the annual cash ISA allowance.* You can open the account with a zero balance if you are transferring in an existing cash ISA (min £2,500).
3. Plus, the option to transfer in your existing cash ISAs.

I am confused about (2) - namely: "Deposit from £2,500 up to the annual cash ISA allowance".

Does this mean that I cannot transfer 9K plus monthly (approx £450)? E.g. I can only transfer £5,640.

many thanks in advance!:)

Consumerist

newuser78 wrote: »

Does this mean that I cannot transfer 9K plus monthly (approx £450)? E.g. I can only transfer £5,640.

The ISA transferred-in does not count towards this year's ISA allowance. i.e. you can add up to £5,640 of new money to the amount transferred-in. According to your link, you have 14 days from account opening to get all your money/transfers into the ISA before it closes to further additions.

Fixed-rate ISAs often only allow an opening deposit and no further contributions. If you contribute less than the full annual allowance when you open the ISA, you may lose the remainder of the allowance. Probably better to open a new ISA for this year's allowance if you can't pay it all in up-front.

pqrdef

newuser78 wrote: »

I am confused about (2)

They're confused as well. As written, it seems to imply that you can't fund the account with £1000 new money and a £1500 transfer, though I suspect you probably can.

People get paid to write this stuff. How hard is it to toss it around until you come up with something clear and unambiguous?

ejv

Thought I could start and deposit the money online for the AA 3.5 % and filled up their forms online and only in the final page they said I have to send in a cheque after the welcome pack and blah...blah...blah...
I didn't click the "finish" button (but the page shows "you've finished") and as such no money has gone to them (as they do it only after receiving the cheque)

I can't bother to wait, has appointment with local Santander and wish to go for their 3.3%.

My question is, am I breaking the law, if by any chance the AA account has been inadvertently opened(for £0.00), and then I deposit £5640 to Santander this afternoon?

AA Issue 3 is an exclusive new money only ISA.