Full ISA Guide Discussion Area

jamieslucky7

I'm planning on puttin £3600 in to an ISA next week. What happens when April 2009 rolls around? Can I simply leave that money + interest earned in the account and start earning tax free interest for 2009/10?

Thanks.

Baldur

jamieslucky7 wrote: »

I'm planning on puttin £3600 in to an ISA next week. What happens when April 2009 rolls around? Can I simply leave that money + interest earned in the account and start earning tax free interest for 2009/10?

Yes - and every subsequent year until you decide to withdraw it.

You can also deposit your new ISA allowance in each subsequent year, either in that ISA or with a different ISA manager and, if you wish, transfer the ISA funds if a better interest rate is offered by a different ISA manager.

aldo_pearson

Hi,

I have been paying into a Cash ISA with HSBC for a few years and would now like to move to another provider. I have paid into the HSBC ISA this tax year - can I transfer all the funds to another provider and then continue paying into the NEW ISA for the remainder of this tax year? Or can I only pay into one ISA, i.e. the HSBC one, for this tax year, then transfer in April?

Many thanks,

Alan

david78

aldo_pearson wrote: »

I have been paying into a Cash ISA with HSBC for a few years and would now like to move to another provider. I have paid into the HSBC ISA this tax year - can I transfer all the funds to another provider and then continue paying into the NEW ISA for the remainder of this tax year?

Yes. If you have paid (say) £2000 in the ISA so far, you can transfer it to a new provider then top up the new account with £1,600.

Be careful if you are transferring to a fixed rate ISA though, as some of these do not let you make additional payments once the transfer in has been made. In such cases it may be better to wait until you have topped up the account first. Some ISA providers (e.g. Nationwide) allow you to hold a mix of fixed rate and variable rate accounts so you can get around this problem with them.

veronica46_2

I have cash held in a stocks and shares ISA (which my ex put in my name and which is now mine) but know absolutely nothing about investing it in stocks/shares. I am wary of doing so, as i cannot afford to lose it.
Would it be better for me to withdraw it out of this type of ISA and put it into a cash ISA ?Because at the moment i am not getting anything like the interest I would get on a cash ISA......

StanLFC

Great thread, very helpful so far!

I want to start saving and I'm going to open a Cash ISA soon that I will drip feed up until the end of April.

I am a total newbie to this, so just have a couple of questions please.

1) If i want to withdraw money from the ISA before April 5th, does it cost me to withdraw it?

2) If I deposit say £3000 of my allowance over the year, but withdraw say £1000 before the end of the tax year, do I only earn interest on what is in the ISA on April 5th? I am not sure how the interest earned, I find that a bit confusing

3) Am I right in thinking that once the yearly allowance is up, you can just leave the money in the ISA, earn your interest and then start adding your next years allowance? Then at the end of the 2nd year, say if you have £6000 in total in there, do you earn interest on the whole £6000 or just the "new" money added in the current tax year?

I hope I am not being to stupid haha, and I appreciate any help!

Stan.

Baldur

StanLFC wrote: »

1) If i want to withdraw money from the ISA before April 5th, does it cost me to withdraw it?

It depends on the Terms & Conditions of your particular Cash ISA account, but most easy access Cash ISAs do not incur a withdrawal fee BUT you cannot replace that withdrawn money and you lose its tax free status for ever.

2) If I deposit say £3000 of my allowance over the year, but withdraw say £1000 before the end of the tax year, do I only earn interest on what is in the ISA on April 5th?

Interest is earned on the running balance, so you would earn interest on £3,000 (plus any compounding interest) until you withdrew, then on £2,000 (plus any compounding interest).

3) Am I right in thinking that once the yearly allowance is up, you can just leave the money in the ISA, earn your interest and then start adding your next years allowance? Then at the end of the 2nd year, say if you have £6000 in total in there, do you earn interest on the whole £6000 or just the "new" money added in the current tax year?

You would earn interest on the £6,000 as well as on any interest which has accumulated in the account.

You appear to be thinking in multiples of £3,000 - the old Cash ISA allowance. The allowance is currently £3,600.

StanLFC

Thanks Baldur for the information, I think I understand what an ISA does now

BUT you cannot replace that withdrawn money and you lose its tax free status for ever

I understand about the not being to replace withdrawn money etc, but you say I lose its tax free status for ever? On what do I lose this? The rest of the money in the ISA?

Finally, I would like to open an ISA asap. Is it possible you can recommend 1 or 2 easy access ones that are decent?

Thanks again.

Baldur

StanLFC wrote: »

I understand about the not being to replace withdrawn money etc, but you say I lose its tax free status for ever? On what do I lose this? The rest of the money in the ISA?

Only on the amount which you withdraw (i.e. on any tax-free compound interest that it would have earned over the years while it was sheltered in the ISA account) as it can never be replaced.

Finally, I would like to open an ISA asap. Is it possible you can recommend 1 or 2 easy access ones that are decent?

Not personally, as all of my current ISAs are Fixed-Rate ones at the moment. Suggest that you have a look through this post, here and maybe check out here.

StanLFC

Baldur wrote: »

Only on the amount which you withdraw (i.e. on any tax-free compound interest that it would have earned over the years while it was sheltered in the ISA account) as it can never be replaced.


Not personally, as all of my current ISAs are Fixed-Rate ones at the moment. Suggest that you have a look through this post, here and maybe check out here.

Yeah understood now, cheers for the help.

Had a look at the links and I'm going to open an Icesave ISA soon