confused about ISA £3000 or £7000 ?

satish_141

Hi All,

I aleardy have a direct ISA for me (£3000) at Alliance Leicester. But somewhere I read that I could invest upto £7000 per year and therefore I wanted to add another £4000 to my existing ISA, I called up the bank and they say I cant add it. But on some sites it says that each can add uptp £3000 in cash and £4000 in shares. Why is it that the bank is not allowing me to add another 4000 which should still put the limit to £7000 ? Please explain.
Help in the matter greatly appreciated as I am really confused.

Regards,

Satish

dunstonh

The Isa limit is £7000 but the cash isa limit is £3000.

If you want to utilise the other £4000 you will need to invest in equity ISAs which unlike cash ISAs can utilise the whole £7k allowance.

So, the bank is correct in refusing to allow you to make 7k into a cash isa. You need to decide whether you want to put the rest into equities (which doesnt have to mean stockmarket).

satish_141

Hi, Thanks for answering my query quickly. I am clear now. So, can I invest £4000 in another equity ISA at Alliance Leicester ? Please let me know.

Regards,
Satish

Chadsman

satish_141 wrote:

can I invest £4000 in another equity ISA at Alliance Leicester ?

Yes :j
It can be with anyone, not just A&L :T

dunstonh

You can invest £4000 in an equity ISA with any provider. I certainly wouldnt use any bank for an equity ISA as none of them have a good enough fund range.

satish_141

Thats great! I am glad I can invest another £4000 in tax free investment for this year. Could anyone of you please suggest me a good Share ISA that I could invest now ? That will be great.

lipidicman

You still sound a little confused. Bear in mind the risk on this £4000. You cant just ask for a 'good share ISA'. You need to consider the period of investment, your attitude to risk, whether you have sufficient 'safe money' in savings accounts....and the list goes on....

satish_141

so unlike the cash ISA, are there chances that I may loose my £4000 when inevesting in an equity ISA ? I have other savings also but that doesnt mean I can afford to loose £4000 of my hard earned money ! I definitely need to be very carful in investing also frankly speaking I dont have much idea about investing in shares and never did so before. Any suggestions ?

lipidicman

satish_141 wrote:

so unlike the cash ISA, are there chances that I may loose my £4000 when inevesting in an equity ISA ?

Going for lunch, so I'll keep this to the point.

YES, you could potentially lose it all. Be warned!

satish_141

thanks for your reply ! I am clear now. But I still would like to invest £4000 in an equity ISA as it may also good tax free returns if the share market does well right ? therefore from your personal experience could you please suggest me any equity ISA ? That will be helpful !

chinagirl

satish_141 wrote:

so unlike the cash ISA, are there chances that I may loose my £4000 when inevesting in an equity ISA ? I have other savings also but that doesnt mean I can afford to loose £4000 of my hard earned money ! I definitely need to be very carful in investing also frankly speaking I dont have much idea about investing in shares and never did so before. Any suggestions ?

Why don't you put it in a high interest savings account, then wait until April 2006 when you can buy another cash ISA with £3000, leaving the other £1000 in the savings account until the next tax year?