Optimum time to open a new ISA

cs0rpc

Hi,

I've got a bit of cash to put into an ISA, but was wondering what people's thoughts were on when to open a new ISA.  Should I wait for interest rates to peak (or at least increase further)?  If so, how long before such increases may ripple down to ISA deals?

Thanks,

R.

jimjames

Open it as soon as you need it. If you want to move to a better deal you can do that. Where is the money now?

Catplan

Yeah open one now, I’d go for flexible cash isa now, picking the one nearest the top rate that suited me. In my experience the best rates for cash isa’s tend to be towards the end of the financial year….got 4.5% back in a March but it was for existing customers only and is now NLA. I think Shawbrook are currently top with 3.78

cs0rpc

Why open now?  If I do that and interest rates go up, I'll be stung with penalty charges to move the money over, right?

eskbanker

cs0rpc said:

Why open now?  If I do that and interest rates go up, I'll be stung with penalty charges to move the money over, right?

Only if you go for a fixed term product.

cs0rpc

Mmm... still not convinced.  You can only open ISA per year, right?  So if I open one now at say at say 3.8% and best easy access ISAs go up to say 4.8%, I can't open up another account until next April.

Right?

Ocelot

cs0rpc said:

Mmm... still not convinced.  You can only open ISA per year, right?  So if I open one now at say at say 3.8% and best easy access ISAs go up to say 4.8%, I can't open up another account until next April.

Right?

You can open as many ISAs as you want (such as to transfer money between providers), it's just that you can't put more than 20k of new money in an ISA in one tax year.

eskbanker

cs0rpc said:

Mmm... still not convinced.  You can only open ISA per year, right?  So if I open one now at say at say 3.8% and best easy access ISAs go up to say 4.8%, I can't open up another account until next April.

Right?

Wrong.

If you open (and fund) one now and want to take advantage of a better deal later in the same tax year, you can open a second account provided you transfer the first one into it (using the new provider's ISA transfer process) so as to keep all current year money together in one place.