Opening multiple cash ISAs in one financial year

propertyhunter

Hello everyone,

I'd really appreciate your help. I opened a cash ISA this financial year and transferred an 83K balance into it from an old cash ISA to boost the interest rate from a really poor one to a slightly less poor one (but market leading).

Question 1:
I have another £20k available - can I open a new cash ISA and put all of the new allowance into it this financial year, or is that not allowed since I opened a cash ISA already this year (i.e. can I open two cash ISAs this year, one with old money and one with new)?

Question 2:
If the answer to the above question is yes, can I transfer funds from another (third) cash ISA with 40k in it from previous financial years into the one with new money in it for this financial year (given the account permits this)? I think it would be ok, but want to check.

FYI - I know I have a lot of money in cash ISAs which is not good from an investment perspective, but it's going to be a deposit for a house which I am looking to buy next year. I'm looking at ISAs because I get taxed on my savings otherwise. I am aware that in real terms the value of my money is declining due to inflation - but I figured that minimising that loss while I look for a house is better than nothing?

Thanks in advance for your help!

molerat

1) Yes.  There is no limit to the number of cash ISAs you can open in a year but you can only (generally) contribute new money to one.

2) Yes

propertyhunter

Perfect. Thanks so much!

Keep_pedalling

The big question is why more into another cash ISA? There are better options.

propertyhunter

I'm definitely open to other options. Just need to bear in mind I need access to the cash for the deposit for a house in the next few months. Supposing I found a house tomorrow, it would be in the account for a minimum of 3 months if the conveyancing process was straightforward (i.e. I would need the funds for completion, but not the deposit). 

Daliah

propertyhunter said:

I'm definitely open to other options. Just need to bear in mind I need access to the cash for the deposit for a house in the next few months. Supposing I found a house tomorrow, it would be in the account for a minimum of 3 months if the conveyancing process was straightforward (i.e. I would need the funds for completion, but not the deposit). 

If you might need the money in the next few months, you should definitely keep it in cash and not get anywhere near investments.

But cash ISAs are unlikely to pay you the best interest. You have a £1,000 (BR tax payer) or £500 (HR tax payer) savings interest allowance, anyway, so with current interest rates, you need huge sums of cash to bust that allowance. But even if you did, you'd very likely to be better off with a non-ISA account as the interest rates of ISAs are massively below the rates you get in non-ISA accounts. Check for your best options here 

propertyhunter

Agree - no stock and shares! That would be very irresponsible on my part. 

I looked at the link and at easy/instant access accounts (ISA or not) and from that I can tell they are very similar at around 0.67%, 0.7% max. Added into the mix is that I have six figures sat across about 4 non-ISA savings account to ensure FSCS protection. I'm this position having sold a property, but not having bought one yet. I think I've made the best out of a less than ideal situation? 

I'm not sure if it's worth even opening a 90 day notice account. 

Daliah

The Paragon 0.65% ISA does sound relatively attractive, I agree, as it's very close to the best instant access non-ISA, and as it allows transfers in.

But that's about it. Marcus won't allow transfers in, and the rest have derisory interest rates.

propertyhunter

Good to know we're on the same page! Thanks so much for your advice everyone.

masonic

propertyhunter said:

I looked at the link and at easy/instant access accounts (ISA or not) and from that I can tell they are very similar at around 0.67%, 0.7% max. Added into the mix is that I have six figures sat across about 4 non-ISA savings account to ensure FSCS protection. I'm this position having sold a property, but not having bought one yet. I think I've made the best out of a less than ideal situation?

It's probably worth mentioning that you may have FSCS temporary high balance protection of up to £1m for 6 months following the property sale (if it is your main residence), see https://www.fscs.org.uk/making-a-claim/claims-process/temporary-high-balances/

propertyhunter

That's good to know - thanks masonic. Really helpful.