Best Cash ISA

Miranda25

Albermarle said:

Firstly you asked if Ford Money is OK . Yes they are , they are fully covered for £85K compensation and their systems/customer service is good in my experience. Like all fixed rate accounts , you can only add to it/transfer into it for a short fixed period after you open it ( in fact a few do not even allow this). The fixed rate on offer may be changed at any time , but they will honour the rate when you open it . For example if today it is 1.25% and you open an ISA with them today . Then by Monday the offer drops to say 1.1% , you still get the 1.25% for the fixed period. Taking a fixed rate is a sort of ( mild ) gamble that interest rates will drop during the period of the fix.
One important point to note that the account has a minimum deposit of £500. It is not 100% clear looking at their website if this can be covered just by transferring in more than £500 OR you have to deposit £500 of new money as a minimum .
This has been mentioned on other ISA threads on the forum and the consensus seemed to be that for most providers , the transfer would be enough and no need to add new money if you did not want to with MOST providers. Personally I would check directly with Ford.

I paid a deposit of £500 in May in Ford's ISA. I hope I do not break a rule and the deposit will not be considered as a current year contribution? As I am going to pay current year contributions in HTB ISA with Nationwide. Thanks.

eskbanker

Miranda25 said:
I paid a deposit of £500 in May in Ford's ISA. I hope I do not break a rule and the deposit will not be considered as a current year contribution? As I am going to pay current year contributions in HTB ISA with Nationwide. Thanks.

If the £500 was new money, rather than a transfer of prior year money from another ISA, then it is indeed considered as a current year contribution, not sure I'm seeing any reason it could be viewed as anything else to be honest?

Miranda25

Does it mean that I cannot do contributions into HTB ISA with Nationwide just because I paid deposit of £500 into Ford's ISA (and then transfer prior year money into Ford). 

Miranda25

Ford said:
"If we don't receive this initial deposit within 14 days of your application we'll assume you no longer wish to save with us. Any deposits received after this time will be returned without interest and you’ll need to re-apply for an account."
Then how am I supposed to pay deposit in order do not break rules? What should I do now if I would like to do contributions into HTB ISA but already paid deposit into Ford? Thank you.

masonic

Miranda25 said:

Does it mean that I cannot do contributions into HTB ISA with Nationwide just because I paid deposit of £500 into Ford's ISA (and then transfer prior year money into Ford). 

That is correct. If your first payment into a cash ISA in this tax year was into the Ford Money ISA then you cannot in this tax year pay anything into your HTB ISA with Nationwide. However, if you made a payment into your HTB ISA since the 5th April and before you paid the £500 into your Ford Money ISA, then your Ford Money ISA is invalid and you've already breached the ISA rules by paying into that.

Miranda25 said:

Ford said:
"If we don't receive this initial deposit within 14 days of your application we'll assume you no longer wish to save with us. Any deposits received after this time will be returned without interest and you’ll need to re-apply for an account."
Then how am I supposed to pay deposit in order do not break rules? What should I do now if I would like to do contributions into HTB ISA but already paid deposit into Ford? Thank you.

You are not permitted to deposit any money into the Ford Money ISA in the same tax year you intend to deposit money into a HTB ISA with Nationwide. If you have already deposited money into the Ford Money ISA and have not made a contribution to your HTB ISA in April (or so far in May) then you may not contibute to the HTB ISA until 6th April 2021 unless you first transfer that ISA to Nationwide.

eskbanker

Miranda25 said:

Does it mean that I cannot do contributions into HTB ISA with Nationwide just because I paid deposit of £500 into Ford's ISA (and then transfer prior year money into Ford). 

Indeed, you can only pay new money into one ISA of each type in any given tax year, and HTB is a cash ISA.  There is a 'split ISA' mechanism used by both Nationwide and Ford that allows savers to pay into multiple cash ISAs by treating them as one, but it's never been possible to pay into multiple cash ISAs with different providers concurrently.

If you transfer your Ford ISA to Nationwide you could then keep paying into the HTB and the non-HTB cash ISA....

Edit: as pointed out by masonic, the situation may be different if you've already paid into both, the order becomes significant.

Miranda25

Masonic I paid into HTB in April. Then I just wanted to transfer last year contributions into Ford's fixed ISA. If they would not ask about deposit I would not break any rules. Not sure what shall I do now? Ford Money requested transfer from Nationwide. Could I just wait for until transfer completed and then withdraw this deposit of £500? This way I would keep only last year contributions in Ford's Money account? Everything so complicated.

masonic

Miranda25 said:

Masonic I paid into HTB in April. Then I just wanted to transfer last year contributions into Ford's fixed ISA. If they would not ask about deposit I would not break any rules. Not sure what shall I do now? Ford Money requested transfer from Nationwide. Could I just wait for until transfer completed and then withdraw this deposit of £500? This way I would keep only last year contributions in Ford's Money account? Everything so complicated.

On what date did you pay into the HTB ISA in April? If it was 5th April or before, then the money you paid into the Ford Money ISA is valid, otherwise it is not. Ford Money offers ISA flexibility, but this is a fixed term ISA, so withdrawal might not be possible, and flexibility might not extend to this ISA. In any case, flexible withdrawal of subscriptions is not guaranteed to prevent a problem with HMRC down the line. Are you still within the cooling off period for your fixed ISA? You could cancel the account and transfer, get your £500 back and start again.

Miranda25

I paid 11th April into HTB Nationwide. 
Ford Money requested transfer on 5th May and transfer is not completed yet (money are still with Nationwide). 
Do you think I should cancel transfer? I cannot start again as this product does not exist anymore. 
Would it be a big problem if I just leave £500 in Ford Money? 

masonic

You were not permitted to pay the £500 into the Ford Money ISA as you had already paid into a different cash ISA in this tax year. If you leave it were it is, HMRC will write to you some time after April 2021 and inform you that you broke the ISA rules and let you know what action they'll be taking as a result. They are at liberty to instruct Ford Money to remove the money from the ISA and treat any interest as taxable. You could just leave the money there and accept the telling off and potential tax liability. Alternatively, you could contact Ford Money and see if they'd be willing to cancel the current year ISA contribution under distance selling regulations while leaving the transfer to complete.