Can you pay in your yearly allowance 1 day before maturity?

tay88

Hello!

I have a new ISA with VirginMoney, and I have transferred a balance from a Santander ISA. I have not used my £20k allowance for this financial year yet. Can I add the £20k one day before the ISA deadline in April, and in the meantime, put this money in an easy access saver? By doing this, would this affect the amount of interest I get from VirginMoney for the ISA? Is the interest for the ISA calculated at the deadline date? I hope you see what I mean!

Thanks

Doctor_Who

tay88 said:

Hello!

I have a new ISA with VirginMoney, and I have transferred a balance from a Santander ISA. I have not used my £20k allowance for this financial year yet. Can I add the £20k one day before the ISA deadline in April, and in the meantime, put this money in an easy access saver? By doing this, would this affect the amount of interest I get from VirginMoney for the ISA? Is the interest for the ISA calculated at the deadline date? I hope you see what I mean!

Thanks

If the VM ISA allows deposits at anytime then you can add money at anytime upto 5 April 2024 and use this year's ISA allowance. 

would this affect the amount of interest I get from VirginMoney for the ISA?

Yes, you obviously wouldn't get interest from the VM ISA if the money is saved elsewhere in an EA account!

 Is the interest for the ISA calculated at the deadline date?

You would need to read the T&Cs on how interest is calculated and credited to the account.

dlevene

Nothing stopping you doing that, but if it was only in the Virgin ISA for one day, it would only earn interest for that one day.

(That interest would be tax free while the interest earned in any non-ISA account prior to that would be taxable, depending on your PSA etc)

badger09

I would advise against leaving your ISA deposit until 5 April, especially 5 April 2024 which is a Friday. If you’re transferring via Faster Payments, most will arrive immediately. However some take a few hours & the FP guarantee is that they arrive by close of business on the next working day. It would be so easy to miss the ISA deadline & waste your £20k annual allowance. 

tay88

I have the 

1 Yr Virgin Fixed Rate E-ISA Issue 611

I can't find how and when the interest is calculated

HappyHarry

tay88 said:

I have the 

1 Yr Virgin Fixed Rate E-ISA Issue 611

I can't find how and when the interest is calculated

Daily - as pointed out above.

See here: https://uk.virginmoney.com/savings/helpful-information/interest-calculations/

savit4l8er

badger09 said:

I would advise against leaving your ISA deposit until 5 April, especially 5 April 2024 which is a Friday. If you’re transferring via Faster Payments, most will arrive immediately. However some take a few hours & the FP guarantee is that they arrive by close of business on the next working day. It would be so easy to miss the ISA deadline & waste your £20k annual allowance. 

Very wise and so important. 👍

Murielson

Very basically, they only pay you interest when they have your money otherwise we might all be doing what I think you are suggesting might be an option, ie, earning 2 lots of interest on the same money

If you will pay income tax on savings then you will pay this on the interest on the VM account interest, whereas you won't pay interest on interest earned under cover of the ISA wrapper

sparkiemalarkie

If your Virgin ISA is an easy access ISA it should be easy enough to transfer in this years subscription before the 5th April 2024 deadline...allow plenty of time to move the money though.

If your ISA is fixed, however and you want to put this years ISA subscription in an easy access savings account for the majority of the time because the interest rate is better have you thought about opening a flexible cash ISA.
You can deposit your £20000 into the flexible ISA then withdraw it and put it into a better rate (non ISA) savings account, making sure you return it to the flexible ISA before 5th April 2024.

Maybe read up about flexible ISA's -
they make it possible for you to withdraw your savings and put them into a higher interest savings account and to 'reserve' your ISA allowance from one tax year to another. to do this you 'refill' your flexible ISA before the end of the current tax year and leave it in until the new tax year has started and you can withdraw to a better savings rate.... rinse and repeat