Trading 212 Cash ISA Help

himonster

booneruk said:

himonster said:

jimjames said:

If you take the interest out then you lose that part of your allowance. Leave it in the ISA and the tax free total will increase. Say you have £20k at 5% then at the end of the year you have £21000 in the ISA tax free. Take the interest out and you've only got £20k tax free.

Thank you. But then it'll just sit there in a low interest ISA account after the first year won't it?

Depends on the cash ISA type - if fixed then yes, you usually get put onto a punishment rate if you do nothing after the fixed period ends. T212 is a variable rate though, so there's no cliff edge at the end of 12 months - unless you're on a temporary bonus rate that is (even without this, t212 is competitive)

Thanks. So basically it's just like an easy access high savings account where you can transfer as and when you need it and no fees for taking it all out? 

himonster

jimjames said:

himonster said:

Ayr_Rage said:

You never NEED to transfer an ISA.

There are no limits on transfers, the limit is £20,000 of NEW funds each tax year.

Tax years run from 6 April to the following 5 April, not March.

I thought you had to transfer your ISA if you wanted to take advantage of the higher interest rates once your current rate ends? Otherwise that same money counts towards your limit on the next year?

The point is you don't HAVE to transfer when a rate ends. You can choose to transfer if you want a better rate but it definitely isn't a requirement.

If you take the interest out then you lose that part of your allowance. Leave it in the ISA and the tax free total will increase. Say you have £20k at 5% then at the end of the year you have £21000 in the ISA tax free. Take the interest out and you've only got £20k tax free.

Also, after a year, if I keep the account, why is it important to keep the allowance of £21k? I'd have another £20k allowance the following year?

ob1kinobi

Fossil_36 said:

I've just opened a Trading 212 Cash ISA account via the MSE link but not made a deposit yet. It shows an interest rate of 4.35% with no mention of the 0.72% newbie bonus and I can't see any way of contacting them to confirm it, does anyone have experience of this please?

If you are using the Trading 212 App there are 5 icons at the bottom of the main screen. The first is Home and the 5th is 3 horizontal lines like a burger. Select this 3 line icon (5th icon) which takes you to the options which start with Manage Funds through to Help Centre displayed vertically. The 6th option is Use Promo Code. If you click on this option 6 the MSE promo code needs to be entered here and once it is your bonus interest rate will be applied. I had the same issue and I used the Trading 212 auto help / chat to solve the issue for me. Once the field was populated the bonus interest rate was applied quite promptly. Hope this helps.

slinger2

himonster said:

jimjames said:

himonster said:

Ayr_Rage said:

You never NEED to transfer an ISA.

There are no limits on transfers, the limit is £20,000 of NEW funds each tax year.

Tax years run from 6 April to the following 5 April, not March.

I thought you had to transfer your ISA if you wanted to take advantage of the higher interest rates once your current rate ends? Otherwise that same money counts towards your limit on the next year?

The point is you don't HAVE to transfer when a rate ends. You can choose to transfer if you want a better rate but it definitely isn't a requirement.

If you take the interest out then you lose that part of your allowance. Leave it in the ISA and the tax free total will increase. Say you have £20k at 5% then at the end of the year you have £21000 in the ISA tax free. Take the interest out and you've only got £20k tax free.

Also, after a year, if I keep the account, why is it important to keep the allowance of £21k? I'd have another £20k allowance the following year?

"why is it important to keep the allowance of £21k?" doesn't make sense. There's no allowance of £21k. There's an annual allowance of £20k that you can pay in. In this example there's £21k in the ISA after the interest is added. That's just money. With a flexible ISA you can withdraw money and replace it in the same tax year without using any of your allowance. You can withdraw £1k or £500 or £5k and replace it. It's just money. Don't get too hung up on thinking that this part is what I paid in and this part is interest.

slinger2

himonster said:

booneruk said:

himonster said:

jimjames said:

If you take the interest out then you lose that part of your allowance. Leave it in the ISA and the tax free total will increase. Say you have £20k at 5% then at the end of the year you have £21000 in the ISA tax free. Take the interest out and you've only got £20k tax free.

Thank you. But then it'll just sit there in a low interest ISA account after the first year won't it?

Depends on the cash ISA type - if fixed then yes, you usually get put onto a punishment rate if you do nothing after the fixed period ends. T212 is a variable rate though, so there's no cliff edge at the end of 12 months - unless you're on a temporary bonus rate that is (even without this, t212 is competitive)

Thanks. So basically it's just like an easy access high savings account where you can transfer as and when you need it and no fees for taking it all out? 

Yes, a Cash ISA is just a savings account with a few extra rules. Savings accounts have different terms and conditions and the same applies to Cash ISAs. You need to read them and understand them.

One of the main ISA rules is that if you withdraw money from an ISA, it's then outside the ISA system and if you want to put that money back into an ISA you'll need to use up part of the your annual allowance. "Flexible" ISAs are a way round that (partly anyway). You can withdraw money and replace it into the same account in the same tax year and you don't use any of your allowance. So if you make many withdraw/replacements to your flexible cash ISA you'll have to keep tabs on all this. For instance if you withdraw £5k and later in the tax year put £6k back in, then £5k would be a replacement but the other £1k would be new money and would count as part of your £20k annual allowance.

himonster

Thanks all. Given that I want to prevent being taxed on £20k but also have easy access to it, is the T212 the best option?

slinger2

If you're a new T212 customer and get the "promo" rate there won't be much to beat it. And it's flexible too. Of course, it's a variable rate product so there's no guarantees there. However, there's always the option to transfer it somewhere else if you are not satisfied.

himonster

slinger2 said:

If you're a new T212 customer and get the "promo" rate there won't be much to beat it. And it's flexible too. Of course, it's a variable rate product so there's no guarantees there. However, there's always the option to transfer it somewhere else if you are not satisfied.

Would I need to transfer it or could I just withdraw and start again? 

Is the cash ISA with T212 FSCS protected? I've heard T212 is QMFF?

Ayr_Rage

himonster said:

slinger2 said:

If you're a new T212 customer and get the "promo" rate there won't be much to beat it. And it's flexible too. Of course, it's a variable rate product so there's no guarantees there. However, there's always the option to transfer it somewhere else if you are not satisfied.

Would I need to transfer it or could I just withdraw and start again? 

Is the cash ISA with T212 FSCS protected? I've heard T212 is QMFF?

You've been too lazy to check then, the ISA is FSCS protected.

BTW it's QMMF not QMFF for some of their cash deposits, check the website.

slinger2

himonster said:

slinger2 said:

If you're a new T212 customer and get the "promo" rate there won't be much to beat it. And it's flexible too. Of course, it's a variable rate product so there's no guarantees there. However, there's always the option to transfer it somewhere else if you are not satisfied.

Would I need to transfer it or could I just withdraw and start again? 

Is the cash ISA with T212 FSCS protected? I've heard T212 is QMFF?

If you withdrew and moved it to another ISA that would count as "new" money going in, part of your £20k allowance. So if you want to preserve your allowance you'd have to do a transfer. Whether that's important to you depends on how close you are to the £20k limit.

The T212 cash ISA does not use QMMFs. The S&S ISA does, as does the non-ISA invest account.