My very first ISA

Pavlos

HI

OK I understand the basics. I'm looking to open up two cash ISAs before the end of the tax year - one for myself and one for my wife. We have £3000 to put in each. What I'm wondering about is the Nationwide fixed rate ISA bonds. It seems to me I would be best going for this, as I don't need to access it. I also want to start saving regularly monthly amounts into an ISA, that I may want to access.

So what's best? Do I open up two fixed rate ISA bonds with Nationwide right now, then start a new members ISA or instant access ISA from April, with monthly contributions? When the fixed rate ISas mature next March, would I need to move that money somewhere, or does the bond continue? If I have to put the money somewhere does that mean I can't invest any more in that tax year?


Ta

Pavlos

No help then?

SirSaveALot_2

Pavlos wrote: »

HI

OK I understand the basics. I'm looking to open up two cash ISAs before the end of the tax year - one for myself and one for my wife. We have £3000 to put in each. What I'm wondering about is the Nationwide fixed rate ISA bonds. It seems to me I would be best going for this, as I don't need to access it. I also want to start saving regularly monthly amounts into an ISA, that I may want to access.

So what's best? Do I open up two fixed rate ISA bonds with Nationwide right now, then start a new members ISA or instant access ISA from April, with monthly contributions? When the fixed rate ISas mature next March, would I need to move that money somewhere, or does the bond continue? If I have to put the money somewhere does that mean I can't invest any more in that tax year?


Ta

Hi
Since you wanted advice fast, rather than wait for one of the better posters :eek:...

NW FRISA sounds like a good plan to me. You should be able to use this year's ISA allowance, but need to be quick as the tax year ends on April 5th.

I think the ISA reverts to a standard variable rate ISA after the year is up. So you could then think about transfering it if a better product is available. However, the fixed rate is also available for 2 years if that suits you. The money remains in an ISA at the end of the term so that you don't lose the tax benefits. Transfering an ISA, when done using the correct procedure, does not eat into your annual ISA contribution limits so that's not a concern.

N.B. I'm looking into opening one of these NW FRISAs myself and there are rumours that they have been or are about to be withdrawn - so all the more reason to be quick. Northern Rock have 1 or 3 year FRISAs at 6.1% as an alternative. See the 'Best cash ISAs' regularly updated post on this forum.

With next year's contributions, assuming you don't have a lump sum already saved up then just go for the best 'easy access' ISA. Again, see the Best cash ISAs post and Martin's guide at http://forums.moneysavingexpert.com/showthread.html?t=401374
and http://www.moneysavingexpert.com/savings/best-cash-isa respectively.

Hope this helps...