Opening ISA mid way through Tax Year

Ade99

Hello,

I'm new to the world of ISAs so I'm looking for some help and advice please.

This relates to a 1 year fixed cash ISA.

If I were to open one today then it's maturity date would be 14/10/23. So that would be relevant to Tax Year 23/24 I think.

I know I'd only get interest for the remaining 5.5 months, until 05/04/23. Lesson learnt - open them at the start of the tax year.

Q) Could I open a brand new 1 year fixed cash ISA on 06/04/23 (will mature on 05/04/24 so the new tax year)? 

I'm not sure if that will also be treated as Tax Year 23/24?

Many thanks!

Dazed_and_C0nfused

What exactly is your concern?

Why does it matter which tax year the interest is received?

It isn't necessarily better to get interest for a full year.  Imagine if you'd opened a 1 year fixed rate cash ISA on 6 April and the rate had been 1%.  On £10,000 you would receive £100 interest.

Put the same £10,000 into a 3.5% fixed rate cash ISA now and get interest for 5.5 months.  Which would be £160.

Ade99

My concern is whether in my scenario I'd be opening 2 in the same Tax Year.

I'm getting myself confused between Opening date, Maturing date and Tax Year it applies to I think.

So if I open 1 today, it'll run for a year (opened tax year 22/23) and I can also open one on 06/04/23 because that's tax year 23/24? 

refluxer

In terms of tax years, the important thing to note is that you can pay up to £20k into one cash ISA in any one tax year. 

You can contribute at any time time during that tax year but if you don't open an ISA and fund it by 5th April, then your £20k allowance for that tax year is lost.

If you were to take a 1 year fixed rate cash ISA out today, it'll mature this time next year and you'll get the full year's interest as expected. When it matures doesn't matter - it's when you fund it that matters.

refluxer

Ade99 said:

So if I open 1 today, it'll run for a year (opened tax year 22/23) and I can also open one on 06/04/23 because that's tax year 23/24? 

Yes, that's right.

Albermarle

I'm new to the world of ISAs so I'm looking for some help and advice please.

Then I suggest you spend some time reading through this forum, as every possible question about ISA's, has already been asked and answered numerous times.