ISA Question

DoneWorking

I have an existing Easy Access ISA with Coventry BS with money in it

I have not paid any money into it this tax year

I have opened a new  Fixed ISA with Coventry BS

I have transferred most of the money from the Easy Access ISA into this 

Can I keep both ISAs running

Can I open a third ISA with the unused £20k allowance paid from my current account

I would then have three ISAs

Is this OK

At some point soon I will close the Easy Access ISA with Coventry BS leaving me with two ISAs

eskbanker

You can open (and keep running) as many ISAs as you like, but must ensure that all current year money is in just one of any type, i.e. all current year cash ISA money must be in no more than one.

DoneWorking

eskbanker said:

You can open (and keep running) as many ISAs as you like, but must ensure that all current year money is in just one of any type, i.e. all current year cash ISA money must be in no more than one.

That's such an odd rule

Any idea why

Let's say next year I wanted to pay in £10k to each of my ISAs

Under that rule I would not be able to do this 

Is that correct

eskbanker

DoneWorking said:

eskbanker said:

You can open (and keep running) as many ISAs as you like, but must ensure that all current year money is in just one of any type, i.e. all current year cash ISA money must be in no more than one.

That's such an odd rule

Any idea why

Let's say next year I wanted to pay in £10k to each of my ISAs

Under that rule I would not be able to do this 

Is that correct

Correct, yes, you can't pay into multiple cash ISAs in any tax year.

Not sure of the exact rationale for the rule, but it's always been there, perhaps reflective of the administrative burden of tracking that current year subscriptions don't exceed the annual contribution allowance....

Band7

DoneWorking said:

eskbanker said:

You can open (and keep running) as many ISAs as you like, but must ensure that all current year money is in just one of any type, i.e. all current year cash ISA money must be in no more than one.

That's such an odd rule

Any idea why

Let's say next year I wanted to pay in £10k to each of my ISAs

Under that rule I would not be able to do this 

Is that correct

Assuming both of your ISAs are cash ISAs - why would you want to make deposits into both ISAs?

If one of your ISAs is cash and the other S&S, you can divide your £20k allowance freely between them at deposit time

DoneWorking

Band7 said:

DoneWorking said:

eskbanker said:

You can open (and keep running) as many ISAs as you like, but must ensure that all current year money is in just one of any type, i.e. all current year cash ISA money must be in no more than one.

That's such an odd rule

Any idea why

Let's say next year I wanted to pay in £10k to each of my ISAs

Under that rule I would not be able to do this 

Is that correct

Assuming both of your ISAs are cash ISAs - why would you want to make deposits into both ISAs?

If one of your ISAs is cash and the other S&S, you can divide your £20k allowance freely between them at deposit time

Good point

My logic is as follows
Opened a new Coventry BS Fixed with reasonably high interest at 3.9% using only the money transferred from the existing Easy Access Coventry BS ISA

In Dec open another Fixed ISA hopefully with higher interest using unused ISA allowance of £20k

As you say

Next year I can use same logic

Band7

DoneWorking said:

Band7 said:

DoneWorking said:

eskbanker said:

You can open (and keep running) as many ISAs as you like, but must ensure that all current year money is in just one of any type, i.e. all current year cash ISA money must be in no more than one.

That's such an odd rule

Any idea why

Let's say next year I wanted to pay in £10k to each of my ISAs

Under that rule I would not be able to do this 

Is that correct

Assuming both of your ISAs are cash ISAs - why would you want to make deposits into both ISAs?

If one of your ISAs is cash and the other S&S, you can divide your £20k allowance freely between them at deposit time

Good point

My logic is as follows
Opened a new Coventry BS Fixed with reasonably high interest at 3.9% using only the money transferred from the existing Easy Access Coventry BS ISA

In Dec open another Fixed ISA hopefully with higher interest using unused ISA allowance of £20k

As you say

Next year I can use same logic

In this case you would only deposit new money into one ISA. That's assuming your transfer of funds from the Coventry easy access to the Coventry Fixed was processed as an ISA transfer, rather than a withdrawal from the EA to the Fixed. If the latter, you shot yourself in the foot.

DoneWorking

Band7 said:

DoneWorking said:

Band7 said:

DoneWorking said:

eskbanker said:

You can open (and keep running) as many ISAs as you like, but must ensure that all current year money is in just one of any type, i.e. all current year cash ISA money must be in no more than one.

That's such an odd rule

Any idea why

Let's say next year I wanted to pay in £10k to each of my ISAs

Under that rule I would not be able to do this 

Is that correct

Assuming both of your ISAs are cash ISAs - why would you want to make deposits into both ISAs?

If one of your ISAs is cash and the other S&S, you can divide your £20k allowance freely between them at deposit time

Good point

My logic is as follows
Opened a new Coventry BS Fixed with reasonably high interest at 3.9% using only the money transferred from the existing Easy Access Coventry BS ISA

In Dec open another Fixed ISA hopefully with higher interest using unused ISA allowance of £20k

As you say

Next year I can use same logic

In this case you would only deposit new money into one ISA. That's assuming your transfer of funds from the Coventry easy access to the Coventry Fixed was processed as an ISA transfer, rather than a withdrawal from the EA to the Fixed. If the latter, you shot yourself in the foot.

It was the former

Thanks 

eskbanker

DoneWorking said:

Let's say next year I wanted to pay in £10k to each of my ISAs

Perhaps also worth noting that once opened, there is typically only a short funding window for fixed term accounts, so if you're opening a fixed term cash ISA now then you wouldn't be able to add to it the following tax year anyway....

DoneWorking

eskbanker said:

DoneWorking said:

Let's say next year I wanted to pay in £10k to each of my ISAs

Perhaps also worth noting that once opened, there is typically only a short funding window for fixed term accounts, so if you're opening a fixed term cash ISA now then you wouldn't be able to add to it the following tax year anyway....

That raises a  interesting point

When I open the other Fixed ISA with another Bank using my unused £20k allocation for ISAs

Can I also transfer the remainder of the cash in my Coventry BS Easy Access ISA into this new Fixed ISA in the other bank

eskbanker

DoneWorking said:

eskbanker said:

DoneWorking said:

Let's say next year I wanted to pay in £10k to each of my ISAs

Perhaps also worth noting that once opened, there is typically only a short funding window for fixed term accounts, so if you're opening a fixed term cash ISA now then you wouldn't be able to add to it the following tax year anyway....

That raises a  interesting point

When I open the other Fixed ISA with another Bank using my unused £20k allocation for ISAs

Can I also transfer the remainder of the cash in my Coventry BS Easy Access ISA into this new Fixed ISA in the other bank

Yes, provided the new account accepts transfers.  Depending on the sequence of events, there may also be an issue with partial transfers too, so check the relevant Ts & Cs....