Full ISA Guide Discussion Area

NilReturns

sparrer wrote: »

I know the answers are here somewhere but I just can't find them - I would make a lousy detective! So -

a) can anyone open an ISA for another adult
b) can anyone pay money into an adult's ISA or does it have to be the account holder?

Tia

When opening an ISA, you make certain declarations (such as this is your only ISA in the tax year, that you are not exceeding the limits, etc). Therefore I'd assume the relevant person should open it. I'd assume anyone can pay in the money, but so long as you observe the limits. However above all, it will depend on the terms for the account being opened, so you will need to read the small print.

sparrer

Then it is as I thought, I really just needed confirmation. Thank you

Kylerickards

First time poster...

I have read and reread various posts here but am still a little confused..

If I wish to invest my cash limit into an ISA, do I do that now, then transfer to a different ISA to get a higher introductory rate after a year and so on? Or am I better to open a new one each year, p to my allowance? Is interest usually paid one year after the account opening?

Thanks

badger09

Kylerickards wrote: »

First time poster...

I have read and reread various posts here but am still a little confused..

If I wish to invest my cash limit into an ISA, do I do that now, then transfer to a different ISA to get a higher introductory rate after a year and so on? Or am I better to open a new one each year, p to my allowance? Is interest usually paid one year after the account opening?

Thanks

Interest rates are usually better on fixed term accounts - the longer you can tie up, the higher the rate. If you want instant access, then you will usually need to transfer after a year, as many accounts have a bonus which expires after 12 months.

There is nothing to stop you opening, and paying new money, into a new ISA each year, and at the same time, switching and combining 'old' ISAs to achieve the best rates.

Interest is calculated daily, but usually added at the end of the year, or when you close or transfer your ISA.

sparrer

Kylerickards wrote: »

First time poster...

I have read and reread various posts here but am still a little confused..

If I wish to invest my cash limit into an ISA, do I do that now, then transfer to a different ISA to get a higher introductory rate after a year and so on? Or am I better to open a new one each year, p to my allowance? Is interest usually paid one year after the account opening?

Thanks

You can open an ISA at any time through the year. Different banks have their own investment rules. Generally ISA's offer a one-year higher introductory rate so best to transfer to a new ISA at the end of the year. If you want to stay with the same bank they will do it for you, or if you find one with a better intro rate it should be easy enough to transfer. With mine the interest is paid at the end of the financial year, don't know if they're all the same but I believe so.

Kylerickards

Many thanks for those helpful replies. Is it wise to also open a s&s one at the same time drip feeding say 100 pounds a month into it? I am thinking that with s&s it's more variable, I.e., I could increase or decrease my original "stake" as opposed to a cash Ida?

sparrer

Kylerickards wrote: »

Many thanks for those helpful replies. Is it wise to also open a s&s one at the same time drip feeding say 100 pounds a month into it? I am thinking that with s&s it's more variable, I.e., I could increase or decrease my original "stake" as opposed to a cash Ida?

Sorry can't help you on that one though I'm sure someone else will have some advice, I'm a 'safe saver' so don't do s&s.

Colin297

Can someone explain to me:

What is the story with these limits, cash limit of 5,640 but a stock limit of 11,280 or whatever......so will i only get the advertised interest on the cash amount?

What if i pay in the full 11k, what happens???

Confused.

sparrer

Colin297 wrote: »

Can someone explain to me:

What is the story with these limits, cash limit of 5,640 but a stock limit of 11,280 or whatever......so will i only get the advertised interest on the cash amount?

What if i pay in the full 11k, what happens???

Confused.

Not sure what you mean by 'what happens?'

The max investment on a cash ISA is £5,640. Cash ISA'a have a fixed interest rate, with a high first year intro rate which usually drops after 12 months. You can reinvest in a new ISA each year to take advantage of the new intro rate.

A stocks and shares ISA has a max investment limit of £11,280 which is of course variable - stocks and share going up and down all the time. This is more of a risk than a cash ISA, if they go up you can make a good profit but if they fall so will your investment.

Alternatively you can invest up to £5,640 in a Cash ISA and the balance in a Stocks and Shares ISA each year. hth

innovate

sparrer wrote: »

The max investment on a cash ISA is £5,640. Cash ISA'a have a fixed interest rate, with a high first year intro rate which usually drops after 12 months. You can reinvest in a new ISA each year to take advantage of the new intro rate.

I think I know what you mean, but it isn't really correct to say that all cash ISAs have a fixed interest rate. You can get fixed rate ones - - these are usually fixed-term (1, 2, 3 etc years) too. Most instant access cash ISAs have variable interest rates. Both fixed and variable interest rate can have an introductory bonus, as you say.

You get a new annual allowance for each new tax year. the 2012-13 cash ISA allowance is £5,640, and there will be a similar amount in 2013-14 (not yet announced, will probably happen in the Chancellor's autumn statement).

So you can put up to £5,640 into a cash ISA before April 6 2013. On or after April 6 2013, you can put additional money into a cash ISA. This could be the same as this year's ISA, or a different one.

Given that ISA interest rates often drop after a year, you would most likely ask a new ISA provider to transfer your old ISA. It is critical that you do not make this transfer yourself since you will lose the tax excemption if you do.

Read the article on the main site for further detail.