Best Cash ISA

Miranda25

Thanks Masonic.

Miranda25

masonic said:

Miranda25 said:

masonic said:

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.

Sorry, when cooling off period starts with cash ISA? Ford Money informed me about successful application on 05th May and the same day they requested transfer from Nationwide. Thanks.

It would start from when your application for the ISA was accepted, so you should be within the cancellation period. If they would be willing to cancel your application to subscribe to the ISA in the 2020/21 tax year, while preserving your application for the previous year transfer then that would be the ideal solution to your problem. I'm not sure if they'd be able to do that, but there is only one way to find out.

Just wanted to update: Ford Money informed me today that they will return me back £500 (because of "oversubscription"). I assume HMRC will not contact me after year end in this case.

WRW

Be aware about interest type. I was comparing UBL 5yr fixed ISA 1.4% vs Coventry 5 yrs fixed 1.25%.  Example: you deposit  £2000.  After 5 yrs with UBS you'd have £2140.  With Coventry you'd have £2128.  UBS is still more but it's not quite as big a difference as you'd expect.  Why? - UBS pays simple interest, meaning only the original amount paid in earns interest.  Coventry like most banks pays compound, meaning the interest is regularly added to the initial amount and they pay interest on the total.  With rates as low as they are, it's not much of a difference, but if/when they get a little higher it can make a BIG difference. 
This and other comparison sites should really highlight whether interest is simple or compound. 

eskbanker

WRW said:

Be aware about interest type. I was comparing UBL 5yr fixed ISA 1.4% vs Coventry 5 yrs fixed 1.25%.  Example: you deposit  £2000.  After 5 yrs with UBS you'd have £2140.  With Coventry you'd have £2128.  UBS is still more but it's not quite as big a difference as you'd expect.  Why? - UBS pays simple interest, meaning only the original amount paid in earns interest.  Coventry like most banks pays compound, meaning the interest is regularly added to the initial amount and they pay interest on the total.  With rates as low as they are, it's not much of a difference, but if/when they get a little higher it can make a BIG difference. 
This and other comparison sites should really highlight whether interest is simple or compound. 

This site does highlight that!  https://www.moneysavingexpert.com/savings/best-cash-isa/#fixed clearly states against the UBL products that "Interest paid out of account and not compounded".