Old instant access ISA: Can I now put money into it?

Cloth_of_Gold

I have an instant access cash ISA which I opened many years ago. I put some money into it (well below the £20K max) which I subsequently withdrew. I didn't close it however and left a small balance. Can I add to to it now or can you only add to them within the tax year in which they were opened? I assume I can't add to it now but just wanted to check as on my banking app it appears to be giving me the option to add funds.

If I can add to it, does it count against my current year £20K allowance? If so, there is no point as I might as well just open a new one.

refluxer

Yes, you can pay up to £20k into an easy access cash ISA each tax year but if it was opened a few years ago then the rate is unlikely to be great so you would probably be better off opening a new one (as you suggested) and arranging a transfer of any funds remaining in the old one into it and you'd also be able to pay this year's allowance into it, plus up to £20k each tax year going forward.

The top-paying easy cash ISA without restrictions is current 3.65% with Charter Savings Bank or 3.75% if you have a Virgin Money current account. 

Before you do that though - just make sure that you'll definitely benefit from saving in a cash ISA. Basic rate tax payers can earn up to £1000 a year in savings interest, higher rate tax payers can earn up to £500 and low earners can potentially earn up to £18,570 in combined income and savings interest.

Albermarle

On my bank app, you can still see two cash ISA's with zero money in, that were originally opened and emptied years ago. No idea why they do not just delete them .

Easy Access Cash ISAs Up to 3% Variable (moneyfactscompare.co.uk)

jimjames

Cloth_of_Gold said:

If I can add to it, does it count against my current year £20K allowance? If so, there is no point as I might as well just open a new one.

It would definitely count against your current year allowance, the total is £20k regardless of where you put it. Highly unlikely any old instant access ISA will offer a rate worth bothering with, probably under 1% when you can get nearer 4% with the best rates .

Cloth_of_Gold

refluxer said:

Yes, you can pay up to £20k into an easy access cash ISA each tax year but if it was opened a few years ago then the rate is unlikely to be great so you would probably be better off opening a new one (as you suggested) and arranging a transfer of any funds remaining in the old one into it and you'd also be able to pay this year's allowance into it, plus up to £20k each tax year going forward.

The top-paying easy cash ISA without restrictions is current 3.65% with Charter Savings Bank or 3.75% if you have a Virgin Money current account. 

Before you do that though - just make sure that you'll definitely benefit from saving in a cash ISA. Basic rate tax payers can earn up to £1000 a year in savings interest, higher rate tax payers can earn up to £500 and low earners can potentially earn up to £18,570 in combined income and savings interest.

It's paying 1.25%. What I was wondering was if I opened a new ISA this financial year and put the maximum £20K into it could I also pay into the the old too as it is well below the £20K and always has been. Once there I hoped I could transfer the funds to a better paying one. I daresay this isn't possible but I just wanted to check. I'm aware of the personal savings allowance but thank you for pointing it out. 

eskbanker

Cloth_of_Gold said:
What I was wondering was if I opened a new ISA this financial year and put the maximum £20K into it could I also pay into the the old too as it is well below the £20K and always has been. Once there I hoped I could transfer the funds to a better paying one. I daresay this isn't possible but I just wanted to check.

Correct, that isn't possible for two reasons:

1. You can only pay in up to £20K of new money in aggregate across any/all ISAs in any tax year. 
2. You can only pay new money into one ISA of each type in any tax year.
   

refluxer

Cloth_of_Gold said:

It's paying 1.25%. What I was wondering was if I opened a new ISA this financial year and put the maximum £20K into it could I also pay into the the old too as it is well below the £20K and always has been. Once there I hoped I could transfer the funds to a better paying one. I daresay this isn't possible but I just wanted to check.

Yes, this isn't possible due to the reasons mentioned above. I would forget about paying anything into the old ISA due to it's poor rate - just open a new one for this year's allowance and arrange a transfer of the old one into it with the new ISA provider. Transfers of money from previous tax years don't count towards the current allowance.

Cloth_of_Gold

Thanks @refluxer and @eskbanker . I was only going to pay money into the old one if I could do it as well as open a new one as obviously the current rates are so much better. I thought that being able to pay into the old one and the new one probably wasn't possible but I just wanted to check.