Transfer Cash ISAs Discussion Area

Lokolo_2

sandspider2000 wrote: »

Just a quick question that perhaps someone has an idea about. I've actually used as much of this year's ISA allowance as I can afford, so I'm wanting to open one for next ISA year. However, should I do this now (and get relatively good rates, as the ISA providers want to get everyone's last minute cash before the deadline) or shall I wait until the new ISA year and look around then? Just wondering if the rates now are likely to be better than the rates on the new ISA crop...

TIA.

My opinion and that of most others, is that the best rates are available right now and many of them will drop just as the new tax year begins, so yes it is a good idea to open an ISA now and deposit when the new tax year starts.

Some providers require an immediate deposit, you must avoid those ISA's as you have already contributed to one this tax year.

Munro_Bagger

Lokolo_2 wrote: »

My opinion and that of most others, is that the best rates are available right now and many of them will drop just as the new tax year begins, so yes it is a good idea to open an ISA now and deposit when the new tax year starts.

Some providers require an immediate deposit, you must avoid those ISA's as you have already contributed to one this tax year.

Many thanks Lokolo, for shedding light on what I find a confusing topic! I am looking to open two ISAs - one for transfer, to accept my full allocation from this year (2010-11) [Halifax, opened October], and the other for the new cash allocation this coming year (2011-12).

For the transfer, I guess I can't move my ISA from the Halifax to the current best rate (also Halifax), and so will continue to keep an eye out for the best rates.

For the new ISA, I had pretty much decided on Santander (3.3%). However, after visiting their website I'm now a bit confused - their reminder about the Government Regulations quotes, "if you have opened and paid into a new cash ISA this year, you can still open another cash ISA in the same tax year, as long as you only use this to transfer in cash ISAs funds from previous years".

I was going to open and deposit on April 6th, but now don't know what to do! Does anyone have any advice?

Thanks so much!

rb10

Munro_Bagger wrote: »

For the transfer, I guess I can't move my ISA from the Halifax to the current best rate (also Halifax), and so will continue to keep an eye out for the best rates.

You most certainly can, as long as your current ISA is not currently in the middle of a fixed rate term.

Just phone them up on 08457 26 36 46 to switch to the 3/3.2% rate.

Munro_Bagger

Thanks rb10 - I'll give them a call. So, if I got the right end of the stick (forgive me, it takes a while to sink in), I can transfer my 2010-11 allowance to the new Halifax rate, effectively locking it away on a great rate for a year (rather than have it drop down), and I can open a new cash ISA with another provider, for 2011-12?

adonis10

I'm a bit confused. Here is the scenario.

- Person has £2,800 in Halifax ISA at 0.1%, nothing paid in this year so can still deposit £5,100.
- He would like to upgrade it to the isa they offer at 3%. If this is possible, it will stay as it is.
- He also wants to open a 2010/11 isa with barclays and deposit £5,100 for this year. He will then want to put £5,340 into the barclays one after 6th April.

Issues:
- If Halifax upgrade it, can he leave that ISA open and open the Barclays one? The halfiax one has been open for years. If so, after the 6th april does the halifax one remain an isa at 3%?
- If he goes to Barclays and says "I wish to open a 2010/11 isa and deposit £5,100. I already have one at Halifax but have not deposited into it this year", would this be ok? If yes, does that automatically roll into a 2011/12 isa after 6th april or does he have to go back and open a separate 2011/12 one, thus ending up with 1 halifax and 2 barclays?

Lokolo_2

See my comments on your questions below:

adonis10 wrote: »

I'm a bit confused. Here is the scenario.

- Person has £2,800 in Halifax ISA at 0.1%, nothing paid in this year so can still deposit £5,100. Correct
- He would like to upgrade it to the isa they offer at 3%. If this is possible, it will stay as it is. Yes, this is possible, simply get him to call Halifax and they can do the internal transfer!
- He also wants to open a 2010/11 isa with barclays and deposit £5,100 for this year. He will then want to put £5,340 into the barclays one after 6th April. All of This is possible :j

adonis10 wrote: »

Issues:
- If Halifax upgrade it, can he leave that ISA open and open the Barclays one? The halfiax one has been open for years. If so, after the 6th april does the halifax one remain an isa at 3%?

Yes, as he won't have contributed to an ISA this year he still can open the Barclays one, ISA transfers do NOT count towards the annual ISA limit, however he must act fast as the new tax year is approaching!

Yes the Halifax 3% rate is fixed for 1 year from account opening I believe, and if the rate drops then you can simply transfer it again!

adonis10 wrote: »

- If he goes to Barclays and says "I wish to open a 2010/11 isa and deposit £5,100. I already have one at Halifax but have not deposited into it this year", would this be ok? If yes, does that automatically roll into a 2011/12 isa after 6th april [STRIKE]or does he have to go back and open a separate 2011/12 one, thus ending up with 1 halifax and 2 barclays?[/STRIKE]

Yes, as I mentioned above this is possible, the Barclays ISA will roll into 2011/12 with the same rate, however if he does chose to make a deposit into that ISA next tax year, then he will not be able to contribute to another ISA during that tax year. Naturally it makes sense to deposit into Barclays next tax year rather than Halifax as the rate is higher with Barclays.

Hope that helps :j

Lokolo_2

Munro_Bagger wrote: »

Thanks rb10 - I'll give them a call. So, if I got the right end of the stick (forgive me, it takes a while to sink in), I can transfer my 2010-11 allowance to the new Halifax rate, effectively locking it away on a great rate for a year (rather than have it drop down), and I can open a new cash ISA with another provider, for 2011-12?

YES that's correct, you've mastered the art of ISA's :j

Lokolo_2

Munro_Bagger wrote: »

I was going to open and deposit on April 6th, but now don't know what to do! Does anyone have any advice?

The Santander ISA can be opened without making a deposit according to what others have said on this forum, so you can open one now and then deposit once we hit the new tax year. :j

adonis10

Lokolo_2 wrote: »

See my comments on your questions below:



Yes, as he won't have contributed to an ISA this year he still can open the Barclays one, ISA transfers do NOT count towards the annual ISA limit, however he must act fast as the new tax year is approaching!

Yes the Halifax 3% rate is fixed for 1 year from account opening I believe, and if the rate drops then you can simply transfer it again!


Yes, as I mentioned above this is possible, the Barclays ISA will roll into 2011/12 with the same rate, however if he does chose to make a deposit into that ISA next tax year, then he will not be able to contribute to another ISA during that tax year. Naturally it makes sense to deposit into Barclays next tax year rather than Halifax as the rate is higher with Barclays.

Hope that helps :j

Great stuff, cheers.

Just one final question. I guess it's a case of shopping around each year for the best rate because some don't allow isa's in. So next year he'll have over 10k in barclays reverting to a low rate but will obv only be able to put in the 12/13 subscription amount. Can't have it all I guess!

Lokolo_2

adonis10 wrote: »

Great stuff, cheers.

Just one final question. I guess it's a case of shopping around each year for the best rate because some don't allow isa's in. So next year he'll have over 10k in barclays reverting to a low rate but will obv only be able to put in the 12/13 subscription amount. Can't have it all I guess!

Indeed, ISA providers make it incredibly hard to get a good rate for transfering old ISA's, only new cash gets good rates unless he is prepared to stick it into "fixed term" ISA's, some of which provide good rates and accept transfers in (but you risk that interest rates will rise!)