Transfer Cash ISAs Discussion Area

lkate

gregg.martin wrote: »

Hi, I have recently signed up for a Natwest e-Isa and am trying to transfer my current savings from my Santander account to it. I filled out the transfer form, sent it to Santander and have received a letter today telling me the Natwest account code I gave them is not for an ISA. I could have made a mistake with the account number, but i checked through the form a dozen times, I'm very meticulous with things usually. My question is; instead of transferring the money (£3600), would it be wise for me to withdraw it, and wait till the new tax year and then deposit it in my new Natwest account? I want to try and avoid the hassle of filling out a new transfer form and waiting again. I'm not really sure about the rules regarding my tax free allowance; can I save £5000ish each year, or is it £5000ish in total before i have to pay tax on it? I hope that makes some sort of sense!?

Hypothetically....
You have your £3600. You withdraw it.
Deposit it in a new ISA (Natwest) in the Tax year 2012/13...
This will affect your ISA limit. Leaving you with £2,040 to deposit for the rest of the year. You can't deposit more than this into your ISA account or any other ISA account under your name.
You would have to use a regular savings account that charges tax on interest if you wanted to save more.
You could invest an extra £5640 into stocks and shares, but this is risky and isn't the same as Cash ISAs.

It's definitely worth transferring rather than withdrawing then depositing.

mobydeek

A while ago, I asked what was stopping banks from ditching their proposed interest rate (say 3.5% down to 0.1%) a month after you sign up.

blueberrypie wrote: »

Reputation. By that I mean: if an ISA provider made a habit of doing this, they would become known for it, and potential customers would simply go elsewhere. So while in theory the rate on a variable-rate ISA could drop the day after you fund it, in practice the rates hold for a year.

So what exactly is the difference between a Fixed and Variable ISA if the "rates hold" even for a variable ISA?

What kinds of fluctuations have occurred in the past?
(Only cared about saving for the past 2 months )

Doesn't that leave us with only the small variations in Closure Penalties and other T&C variations?

Thanks!

VoucherMan

mobydeek wrote: »

So what exactly is the difference between a Fixed and Variable ISA if the "rates hold" even for a variable ISA?

From my (limited) experience Fixed rate ISAs generally offer better interest rates, but with penalties for early closure.

mobydeek wrote: »

Doesn't that leave us with only the small variations in Closure Penalties

If you consider the loss of say 9 months interest for early closure on a 3 year fix to be a small variation.

mobydeek wrote: »

and other T&C variations?

These can be quite big variations though.
If I want to take some money out of my variable rate ISA there's no problem.
With fixed rates you may lose a substantial amount of interest. Some do not allow partial withdrawals so you may have to close the ISA.

simpleguy_blr

lkate wrote: »

Apologies if this has already been discussed

My boyfriend has an ISA with Barclays.... Well he actually has about 4 different accounts, but each year he would open a brand new account to get a better rate without transferring her previous ISA to the new one.
So he had quite a fair bit of money locked away in rubbish interest rates.

I recently told him that you can transfer your account to a new ISA with a new interest rate without affecting the yearly limit. He has asked in his bank several times and each time they have said that this is not true, you can't do that.
(Although my bank Nationwide were the ones who told me about it)

I am right in suggesting he can do this? Because I'm going into the bank with him on Saturday to speak to someone with him. They're not fixed term ISAs or anything of the sort so I can't see why he cant transfer, within the same bank to a new ISA

Any help would be greatly appreciated so that I know I'm not going mad here!

He would be able to get so much more out of his money then those near dormant accounts by transferring them to a another provider, As far as I am aware you are free to transfer a Cash ISA any number of times to any provider of your choice, if they are locked or fixed or you need to give a notice then you will lose some interest or might be penalised, you will have to look at the terms of your account.

The link below has some wonderful information on the best accounts available and is constantly updated.
http://forums.moneysavingexpert.com/showpost.php?p=4603369&postcount=1

Spiggle

lkate wrote: »

Apologies if this has already been discussed

My boyfriend has an ISA with Barclays.... Well he actually has about 4 different accounts, but each year he would open a brand new account to get a better rate without transferring her previous ISA to the new one.
So he had quite a fair bit of money locked away in rubbish interest rates.

I recently told him that you can transfer your account to a new ISA with a new interest rate without affecting the yearly limit. He has asked in his bank several times and each time they have said that this is not true, you can't do that.
(Although my bank Nationwide were the ones who told me about it)

I am right in suggesting he can do this? Because I'm going into the bank with him on Saturday to speak to someone with him. They're not fixed term ISAs or anything of the sort so I can't see why he cant transfer, within the same bank to a new ISA

Any help would be greatly appreciated so that I know I'm not going mad here!

Yes, you are absolutely correct.

Unless his current bank has the best rates available for an ISA that allows transfers in, you are better approaching the new provider (bank/building society/etc) to open an account and completing the new provider's transfer form. They will arrange getting the money from the existing accounts.

You don't touch the money in the dormant accounts by the way. Do not withdraw the money as it will lose its 'tax wrapper' and will mess up your/his annual allowance.

Simpleguy has given you the link to the best accounts available. Make sure you look at those that accept transfers in.

Hope that helps,
Spigs

blueberrypie

mobydeek wrote: »

So what exactly is the difference between a Fixed and Variable ISA if the "rates hold" even for a variable ISA?

In terms of interest rate - not much.

But the t&c make a difference. If you have the full ISA allowance available to deposit as one lump sum, and you are certain you won't need access to that money for the next year (or whatever the fixed term is), then a fixed-rate ISA is a fine option.

If you might need the money, though...variable rate is the way to go, so that you can access it without penalty.

And if you intend to save over the course of a few months, rather than with one lump sum, most fixed-rate ISAs won't allow that - so again, a variable-rate is what you need.

leaphaze

Mike_J wrote: »

Hopefully a very simple question with a very simple answer. If you have a cash ISA with one financial institution and you want to move it...BUT you need to retain funds at the original instituation (for various benefits reasons) can you arrange to transfer part (all be it a very big part) of your ISA?

If your cash ISA is for the current financial year, i.e. 2011/12, then the rules state the whole balance plus interest must be transfered (closing the ISA if you have no previous years subscriptions).

But, if you subscribed in previous financial years, i.e. before April 2011, then you can transfer part of your previous financial years' balance. You just specify the amount on the form.

doughuelas

Hi

I have a couple of ISA's due to mature in the coming week or so

I am looking at transferring them both to Santander's Direct ISA (3.3%)

I also have a 2 year fixed ISA due to mature mid june. Is there generally a time limit for transferring old ISA's into new ones?

I cant see anything obvious in the terms and conditions that says it cant be done?

Any info or further advice on which action to take would be greatly appreciated!

thenudeone

There is no government rule preventing ISAs being transferred. It is entirely up the terms on each account whether they accept transfers in, or in the case of transfers out, whether there would be a penalty for transferring out of a fixed-period account early.

doughuelas

thenudeone wrote: »

There is no government rule preventing ISAs being transferred. It is entirely up the terms on each account whether they accept transfers in, or in the case of transfers out, whether there would be a penalty for transferring out of a fixed-period account early.

Thanks

I'd be looking to move the two isa's that are about to reduce in rate. With the fixed rate one i'd wait until the fixed rate has ended before moving

Just wanted to make sure the new ISA provider wouldnt reject the transfer in june saying that all transfers had to be conducted within 30 days of the new ISA account being opened etc

As i said i cant see anything obvious in the terms and conditions preventing me from doing so

Thanks