Confused about ISAs

lucy_w86

I am slightly confused about ISA's.

I have an ISA with Egg and I would like to open a new ISA with someone else when the new tax year starts.

Can I keep the Egg ISA open without using it and open a new one in April (the new tax year)?

I know some places dont offer you the same rate if you transfer from one ISA to another, therefore, can I open a new ISA, take out my funds from my current one and put them in the new one (without doing an actual transfer)?
Also, I opened my current ISA in May 2007, does this affect anything?

pollyanna24

Can't help, just thought I'd mention that I was going to ask exactly the same question! Weird!

My Nationwide ISA isn't the best rate, so was wondering if I could just open up the Barclays/Lloyds one (can't remember which) for 6.5% and keep this one in Nationwide or if there were certain rules about this.

I suppose really I wouldn't mind all the money in the higher interest rate one. Is this what transferring means?

Sorry to hijack though.

teeni

I think you have to make sure your new provider does the transfer for you not take it out and deposit it manualy, I know I was told that i had to do this last year or i would have lost out, check with the new provider before you do anything.

I just opened a new ISA and the transfer was all sorted for me.

Lokolo

pollyanna24 wrote: »

Can't help, just thought I'd mention that I was going to ask exactly the same question! Weird!

My Nationwide ISA isn't the best rate, so was wondering if I could just open up the Barclays/Lloyds one (can't remember which) for 6.5% and keep this one in Nationwide or if there were certain rules about this.

I suppose really I wouldn't mind all the money in the higher interest rate one. Is this what transferring means?

Sorry to hijack though.

Generally speaking you can transfer your old Cash ISAs into one high paying one. So yes this is what it means.

However the 6.5% Barclays Tax Haven ISA (is this the one you are on about?) does not allow transfer in, but only new money so you won't be able to do so.

I don't know what interest on your ISA at the moment is, but if its like than 5% you can find some other ISA which will alllow transfers in and you can transfer your money into the new higher interest one. As long as you don't personally put money in yourself and allow the banks to sort it out for you.

lucy_w86 wrote: »

I am slightly confused about ISA's.

I have an ISA with Egg and I would like to open a new ISA with someone else when the new tax year starts.

Can I keep the Egg ISA open without using it and open a new one in April (the new tax year)?

I know some places dont offer you the same rate if you transfer from one ISA to another, therefore, can I open a new ISA, take out my funds from my current one and put them in the new one (without doing an actual transfer)?
Also, I opened my current ISA in May 2007, does this affect anything?

Yes, you keep your Egg ISA sitting there earning interest and you can open another one elsewhere, do not, repeat, do not, deposit money into the old Egg Cash ISA.

But yes you could, if you wanted, take out the money from your Egg Cash ISA and put it in a new ISA but this would defeat the whole point, the idea is you keep compounding your money, so year 1 you have £3000, year 2 you have £6000. Or you transfer your money, which is what happens the majority of the time.

And no, opening in May 07 won't effect anything, as long as you don't put money into a new ISA before 6th April.

KiKi

In short, you can have as many cash ISAs as you like. But:
* you can only open one new ISA in any one financial year
* you can only add new money to *one* of the ISAs in any one financial year
* you can not add new money in excess of the total amount allowed in any one financial year (£3600 for 08-09)

(As someone else said, there's no point opening loads of ISAs, as they point is that you can benefit from compounded interest year on year by having your money in the one.)

You can undertake transfers from one ISA to another at any point (as long as the ISA allows transfers in) because it's not considered 'new'. And the golden rule of a transfer: Do not take the cash out and do it yourself, or it's no longer a transfer. You have to instruct your ISA providers to do it.

HTH
KiKi

Paul_Herring

KiKi wrote:

you can only open one new ISA in any one financial year

Incorrect. You can open as many as you want during a year.

Your current year's contributions, however, must be in only one ISA, and must be transferred (if you do) together. Any further contributions must be made to the account where the current year's contributions are held.

KiKi

Thanks Paul, apologies. So you can open many ISA accounts in one year - as long as you don't put any money in there if you're already contributing to another account?

I wasn't aware of that, so thanks for the info.

KiKi

Paul_Herring

KiKi wrote: »

So you can open many ISA accounts in one year - as long as you don't put any money in there if you're already contributing to another account?
KiKi

Yes. how else would you be able to
1) Transfer this year's contributions to another institution?
2) Transfer previous years' contributions to more than one institution? (if you wanted to, you are allowed to.)

KiKi

Paul_Herring wrote: »

Yes. how else would you be able to
1) Transfer this year's contributions to another institution?
2) Transfer previous years' contributions to more than one institution? (if you wanted to, you are allowed to.)

I thought you would do it by opening your next ISA on 6th April, then adding the 'new' money in. I really didn't realise you could open an ISA pre-April 6th, leave it at zero balance, then add in 'new' money after April 6th, and transfers whenever.

I suppose I always associate opening an ISA with adding 'new' money as it's the way I do it; but logically, of course, you can open at any time to transfer.

KiKi

lucy_w86

KiKi wrote: »

I thought you would do it by opening your next ISA on 6th April, then adding the 'new' money in. I really didn't realise you could open an ISA pre-April 6th, leave it at zero balance, then add in 'new' money after April 6th, and transfers whenever.

I suppose I always associate opening an ISA with adding 'new' money as it's the way I do it; but logically, of course, you can open at any time to transfer.

KiKi

Oh, so I could open one now but not start using it until april 6th?

Could I transfer from the old ISA to the new ISA at any point during the year (post april 6th)?

AbbieCadabra

i think i'm being really thick, forgive me!

2006/07 mini cash Isa with Smile £3000 + interest
2007/08 mini cash isa with Egg £3000 + interest

so for 2008/09 i want a new cash ISA with £3600 (new limit, yes?) at a good rate - presumably i have to get smile/egg to transfer to the new a/c, whoever that will be with, or can the new one transfer both of the old ones?

quite simple for those in the know, but i need it 'simple' fashion please!

MTIA