Full ISA Guide Discussion Area

stark_source

Hi everyone,

So, I've grown slightly confused and need a little clarity.

Here's the current situation:

1) Santander ISA into which I transfered my 2011-2012 ISA Cash in March 2012 which is set at 3.3% till April this year, I think. I have not put any new money into this account, and have just received the deposit of interest this month. It'll be 0.50% from end of March 2013

2) BS ISA into which I have been depositing new cash since last April 2012, and which is getting me 3.5% till October 2013, and will be maxed out by April.

Now, obviously from April 2013 I'll be able to open a new ISA, and my choices are:

a) Coventry BS ISA 2.8% which is no transfers so this would be for new money only.

b) Chesire ISA at 2.5% which accepts transfers, so I could put all my old ISAs in there.

Correct me if I'm wrong, but you can only open one new ISA a year, right?

Am I right in saying then, that I can't open a new Chesire ISA at 2.5% to transfer in all my old ISAs while also opening the new Coventry ISA at 2.8% any new money I'd like to deposit after my BS ISA ISA at 3.5% runs out in October.

I am aware that I could keep putting money into my present BS ISA at 3.5% till October.

As you can probably gather, I'm confused.

From your perspective, what's the best way to go?

Spiggle

stark_source wrote: »

...
1) Santander ISA into which I transfered my 2011-2012 ISA Cash in March 2012 which is set at 3.3% till April this year, I think. I have not put any new money into this account, and have just received the deposit of interest this month. It'll be 0.50% from end of March 2013

2) BS ISA into which I have been depositing new cash since last April 2012, and which is getting me 3.5% till October 2013, and will be maxed out by April.

Now, obviously from April 2013 I'll be able to open a new ISA, and my choices are:

a) Coventry BS ISA 2.8% which is no transfers so this would be for new money only.

b) Chesire ISA at 2.5% which accepts transfers, so I could put all my old ISAs in there.

Correct me if I'm wrong, but you can only open one new ISA a year, right?

Am I right in saying then, that I can't open a new Chesire ISA at 2.5% to transfer in all my old ISAs while also opening the new Coventry ISA at 2.8% any new money I'd like to deposit after my BS ISA ISA at 3.5% runs out in October.

I am aware that I could keep putting money into my present BS ISA at 3.5% till October.

As you can probably gather, I'm confused.

From your perspective, what's the best way to go?

No, wrong I'm afraid. You can only subscribe, i.e. pay new money in, to one ISA per financial/tax year. However, if you have matured ISA cash, that can be transferred to a different ISA that allows transfers in without affecting your annual allowance.

You can also transfer new money paid in to an ISA during any financial year provided all of the current year's subscription is kept together and moved as one lump sum. So if, for example, you've paid in £1k after April and then another better paying ISA that allows transfers in becomes available, you could transfer the whole £1k into the better ISA and continue paying into it. (All this is based on easy access/variable rate ISA not fixed rate ISA (FRISA) and you should always check terms and conditions of any particular product.)

If it was me I would transfer the Santander balance into the Cheshire 2.5%.

Now I haven't done the necessary sums, but I would continue paying as much as possible into the 3.5% BS ISA until October to maximise that all important extra 1% in interest. At that time you could then transfer the entire BS ISA balance (2012-2013 and 2013-14 subscriptions) into the Cheshire 2.5%* and if you have any of your allowance left continue paying into that ISA for the remainder of the financial year/until allowance is reached.

*Unless a better product is available in October.

I hope that may help a little.

All the best,
Spiggle

stark_source

Thank you spiggle!!! A perfect answer!! I think that's the best route too! Thanks so much!

confused__student

I'm a student, and want to start saving for after graduation.
I will have £1650 a year for 3 years to put away and I was wondering if anyone would be able to give me any advice on the best account to save in?
I've looked around, and the more I look at all the options, the more confused I get...

Thanks

le_loup

Look at the links on the top of this page.

mickael28

Spiggle wrote: »

No, wrong I'm afraid. You can only subscribe, i.e. pay new money in, to one ISA per financial/tax year. However, if you have matured ISA cash, that can be transferred to a different ISA that allows transfers in without affecting your annual allowance.

You can also transfer new money paid in to an ISA during any financial year provided all of the current year's subscription is kept together and moved as one lump sum. So if, for example, you've paid in £1k after April and then another better paying ISA that allows transfers in becomes available, you could transfer the whole £1k into the better ISA and continue paying into it. (All this is based on easy access/variable rate ISA not fixed rate ISA (FRISA) and you should always check terms and conditions of any particular product.)

Hi Spiggle,

Reading your comment above and the rules in the article:

• Current year's cash ISA.
  You may move ALL of this to another cash ISA, or into a shares ISA. You cannot split it into more than one provider or ISA type.
• Past years' cash ISAs.
  You may move ALL of this to another cash ISA or into a shares ISA, or SPLIT it between more than one cash or shares ISA.

How would a situation like this work?

• You have previous tax year savings in a Cash ISA for a value of £7,000
• You transfer that money to a new Cash ISA for the new tax year.
• You subscribe to this new Cash ISA for the current tax year by paying £1,000 in.
• You've got a total of £8,000 (£7,000 which were transferred from previous years and £1,000 for the current tax year)
• If you want to open a new Cash ISA during the current tax year, would you need to move the whole amount of £8,000 (as all the money is in the same account) or would you just need to move the whole contribution of £1,000 which is the portion that was contributed in the current tax year?

I am not sure how that situation would work when you've mixed previous and present contributions in the same ISA...

Any help, much appreciated!

innovate

mickael28 wrote: »

• If you want to open a new Cash ISA during the current tax year, would you need to move the whole amount of £8,000 (as all the money is in the same account) or would you just need to move the whole contribution of £1,000 which is the portion that was contributed in the current tax year?

You would only have to transfer the £1K.

Though I can't see any reason why you would do that - - either you get better interest in the new ISA and therefore want to transfer your entire balance to it. Or you get better interest in the old ISA, in which case any partial transfer wouldn't make any sense.

mickael28

innovate wrote: »

You would only have to transfer the £1K.

Though I can't see any reason why you would do that - - either you get better interest in the new ISA and therefore want to transfer your entire balance to it. Or you get better interest in the old ISA, in which case any partial transfer wouldn't make any sense.

Thanks Innovate.

That's what I was understanding as well, but then I read this article from "Feb 18th, 2013": http://www.moneywise.co.uk/banking-saving/savings-accounts-isas/can-i-pay-two-isas-one-tax-year

Where someone was talking about an ISA account which had contributions for 2011/12 (e.g. £7K) and 2012/13 (e.g. £1K) and the answer they received regarding how to make the transfer was:

If Halifax really wanted your money, it could have suggested that you simply transferred your existing ISA funds from your NS&I ISA (ie, the £1K in our example) to the Halifax account – including the money you had invested with NS&I during the 2011/12 tax year (ie, the £7K in our example).

I thought you could just move the contribution for that year, ie. the £1K in this example, so not sure why he was told by moneywise experts that he had to move the money from previous years as well (£7K)? Maybe it's mandatory to move the whole amount that you've got in the latest ISA once you've made a contribution for that year (even if most of it comes from previous years)?

The reason would be in case you want to let's say open a 3y ISA with just the £1K and not with the whole £8K.

innovate

I haven't read the Moneywise article, but from the extract, I deduce they are not saying you must transfer the whole lot. They suggest you would transfer all, probably for very good reason, such as the interest rate being better in the new ISA. Which is in line with what I said before.

typistretired

Just received a letter from Saga informing me that my maturing ISA for 2012-2013 (which is currently paying 3.60%) can be re-invested in another 3 year fixed rate isa (no 1 year isa offered) at the rate of 2.30% when it matures in April.

I think my best bet is to transfer it to my Nationwide fixed isa paying 3.10% until 30th September 2013.

What do the experts think? Is it worth moving to get higher interest for 5 months or do they believe interest rates are going to drop lower??