ISA guru question

pecunianonolet

The Paragon Triple Access Cash ISA at 3.2% is indeed attractive, especially because of the monthly interest payment but the 3 withdrawals per tax year are a bit an annoyance.

Better is the Coventry Limited Access ISA Online (4) which currently is at 3% but is going up to 3.25% on 4th of April and interest is paid either monthly or annualy and there are 6 withdrawals allowed. Although, if you want to transfer away (closure) you get a 50 day interest penalty so to play risk free, only 5 withdrawals really. 

Another nice alternative is Principality Online ISA. The rate is only marginaly worse with 3.1%, interest only paid annualy but unlimited withdrawals so a great account for drip feeding reg savers. They say they currently review rates after last BOE meeting so rate might or might not go up.

The last to consider would be the Skipton ISA Tracker, unlimited withdrawals, interest either monthly or annualy but it tracks 1.25% below base rate so just now 2.75% but after the last BOE rise it should get up to 3% soonish. Worst rate out of the ones on offer at the moment but if BOE is going to increase again by 0.25bpt it could go up to 3.25% but that would not be, if it happens, be until 11th May.

So strongest contenders are Coventry and Principality, leaning more towards Coventry

I also found that MSE is mentioning the trick but it's not really obvious to find so probably get's lost easily on their site. 
https://www.moneysavingexpert.com/savings/flexible-isas/

jimjames

Virgin money ISA is flexible and pays (currently) 3%

pecunianonolet

jimjames said:

Virgin money ISA is flexible and pays (currently) 3%

We considered Virgin but OH doesn't have a Virgin account and rates with others are better so we go with Coventry as we think we can manage with the withdrawal limit.

Another question, with the Virgin 1y fix the funding window goes now well into April after product has been withdrawn. If I make another contribution on 6th April of let's say 5k, will I still be able to open another cash ISA next fiscal with a different provider for the remaining 15k? I thought you can only have one cash ISA product with one institution per financial year but does the opening date or contribution date count here? 

doodlector

pecunianonolet said:

jimjames said:

Virgin money ISA is flexible and pays (currently) 3%

We considered Virgin but OH doesn't have a Virgin account and rates with others are better so we go with Coventry as we think we can manage with the withdrawal limit.

Another question, with the Virgin 1y fix the funding window goes now well into April after product has been withdrawn. If I make another contribution on 6th April of let's say 5k, will I still be able to open another cash ISA next fiscal with a different provider for the remaining 15k? I thought you can only have one cash ISA product with one institution per financial year but does the opening date or contribution date count here? 

It's the date of contribution that is important so no you won't be able to contribute to a different ISA without transferring all of the current years subscription to the new one aswell.

There are some institutions which allow you to split your ISA allowance between different ISAs that they offer (i.e. you can have a fixed ISA and easy access ISA with them and it will just count as one ISA for the subscription rules) but this is quite rare.

pecunianonolet

doodlector said:

pecunianonolet said:

jimjames said:

Virgin money ISA is flexible and pays (currently) 3%

We considered Virgin but OH doesn't have a Virgin account and rates with others are better so we go with Coventry as we think we can manage with the withdrawal limit.

Another question, with the Virgin 1y fix the funding window goes now well into April after product has been withdrawn. If I make another contribution on 6th April of let's say 5k, will I still be able to open another cash ISA next fiscal with a different provider for the remaining 15k? I thought you can only have one cash ISA product with one institution per financial year but does the opening date or contribution date count here? 

It's the date of contribution that is important so no you won't be able to contribute to a different ISA without transferring all of the current years subscription to the new one aswell.

There are some institutions which allow you to split your ISA allowance between different ISAs that they offer (i.e. you can have a fixed ISA and easy access ISA with them and it will just count as one ISA for the subscription rules) but this is quite rare.

Ok, thanks for the info. Would have been too good to be true. It essentially would only make sense if I would put the full 20k into the fix on the 6th of April really.

Alternatively, what should be possible is to put 5k in on the 6th, wait until the fix matures on 29th March 2024, add the remaining 15k to the cash ISA after maturation and either transfer straight to a different provider or wait until 6th April 2024 and transfer to the best rate available then?

doodlector

Yes.   You could also use your remaining 15k allowance in a different type of ISA instead (e.g. stocks and shares or IFSA).  You just can't 'subscribe' (i.e. add money to) more than one ISA of the same type in each tax year.

pecunianonolet

doodlector said:

Yes.   You could also use your remaining 15k allowance in a different type of ISA instead (e.g. stocks and shares or IFSA).  You just can't 'subscribe' (i.e. add money to) more than one ISA of the same type in each tax year.

Thanks and aware you can split across different types but not interested in stocks & shares. 

pookey

pecunianonolet said:

The Paragon Triple Access Cash ISA at 3.2% is indeed attractive, especially because of the monthly interest payment but the 3 withdrawals per tax year are a bit an annoyance.

Better is the Coventry Limited Access ISA Online (4) which currently is at 3% but is going up to 3.25% on 4th of April and interest is paid either monthly or annualy and there are 6 withdrawals allowed. Although, if you want to transfer away (closure) you get a 50 day interest penalty so to play risk free, only 5 withdrawals really. 

Another nice alternative is Principality Online ISA. The rate is only marginaly worse with 3.1%, interest only paid annualy but unlimited withdrawals so a great account for drip feeding reg savers. They say they currently review rates after last BOE meeting so rate might or might not go up.

The last to consider would be the Skipton ISA Tracker, unlimited withdrawals, interest either monthly or annualy but it tracks 1.25% below base rate so just now 2.75% but after the last BOE rise it should get up to 3% soonish. Worst rate out of the ones on offer at the moment but if BOE is going to increase again by 0.25bpt it could go up to 3.25% but that would not be, if it happens, be until 11th May.

So strongest contenders are Coventry and Principality, leaning more towards Coventry

I also found that MSE is mentioning the trick but it's not really obvious to find so probably get's lost easily on their site. 
https://www.moneysavingexpert.com/savings/flexible-isas/

Thanks for sharing this. 

Here's how:

At the start of the new tax year – so from 6 April – withdraw the ISA cash.

Put it in (several) high interest accounts (see our Top savings guide for the best deals).

Before 5 April the following year just put it back in the ISA to keep your tax protection.

Repeat the process again and again.

This means your money would be earning more interest for most of the year, whilst still keeping the long-term benefits of an ISA.

Does this mean the whatever money that's been invested that came out of the ISA is also tax free please?
So if I paid in 20,000 at the start of the tax year and then withdraw 19,999, wherever I invest it would be tax free please? 

Johnjdc

No. If it's not in an ISA, it's not tax-free.

jimjames

pookey said:

pecunianonolet said:

The Paragon Triple Access Cash ISA at 3.2% is indeed attractive, especially because of the monthly interest payment but the 3 withdrawals per tax year are a bit an annoyance.

Better is the Coventry Limited Access ISA Online (4) which currently is at 3% but is going up to 3.25% on 4th of April and interest is paid either monthly or annualy and there are 6 withdrawals allowed. Although, if you want to transfer away (closure) you get a 50 day interest penalty so to play risk free, only 5 withdrawals really. 

Another nice alternative is Principality Online ISA. The rate is only marginaly worse with 3.1%, interest only paid annualy but unlimited withdrawals so a great account for drip feeding reg savers. They say they currently review rates after last BOE meeting so rate might or might not go up.

The last to consider would be the Skipton ISA Tracker, unlimited withdrawals, interest either monthly or annualy but it tracks 1.25% below base rate so just now 2.75% but after the last BOE rise it should get up to 3% soonish. Worst rate out of the ones on offer at the moment but if BOE is going to increase again by 0.25bpt it could go up to 3.25% but that would not be, if it happens, be until 11th May.

So strongest contenders are Coventry and Principality, leaning more towards Coventry

I also found that MSE is mentioning the trick but it's not really obvious to find so probably get's lost easily on their site. 
https://www.moneysavingexpert.com/savings/flexible-isas/

Does this mean the whatever money that's been invested that came out of the ISA is also tax free please?
So if I paid in 20,000 at the start of the tax year and then withdraw 19,999, wherever I invest it would be tax free please? 

No, the whole idea of the ISA is that everything inside it is tax free. Once outside the wrapper the interest it generates is taxable but subject to the various allowances may not attract tax. With ISA rates now on a par with non ISA rates the trick of removing money is much less attractive.