Full ISA Guide Discussion Area

mafield

I have been reading through this thread today, yes, all 36 pages and about 5 years worth, and I am amazed, no astounded, at the number of times the same old questions are asked, time and time again.

Does no one ever bother to read even part of the thread, which would amply answer probably 95% of all questions posed.

I would like to thank all those taking the time to answer these repetative questions, their patience must be a great virtue.

Giggs_11

innovate wrote: »

1.95% AER on £5000 yields £97.50 a year.




You can keep as much as you like in an ISA. You just cannot deposit [yourself] more than you annual allowance in any one year. Interest earned does not count towards your annual allowance.

E.g I know someone who yesterday had some £31K in an ISA, accumulated over the years. They were paid about £1,300 in interest today, so their balance is now something over £32K. They have not yet made any deposits into an ISA this year, so they still can deposit £5,760 (though not into the old ISA since that one has been closed for new deposits for some time).

Jeez thanks, what was I thinking £800 a year haha!

It's not really worth it then is it? May as well just have 2 separate bank accounts for what I need. Think I got confused and thought it was 1.95% interest per month. Banking never was my strong point

innovate

If you are a tax payer, a cash ISA is generally worth it because you get better interest there due to the tax-free status. As you grow your ISA balance over the years, it might well be worth it, particularly if interest rates increase again.

However, we are living in odd times, and you might get better returns from non-ISA accounts. Saving up for an ISA deposit in a Regular Saver, or interest-paying current account, is just one of the possible alternative approaches.

Vladislavs

innovate wrote: »

If you are a tax payer, a cash ISA is generally worth it because you get better interest there due to the tax-free status. As you grow your ISA balance over the years, it might well be worth it, particularly if interest rates increase again.

However, we are living in odd times, and you might get better returns from non-ISA accounts. Saving up for an ISA deposit in a Regular Saver, or interest-paying current account, is just one of the possible alternative approaches.

Innovate, you seems to be one of the most knowledgeable persons here
What do you think about current Flexclusive ISA offer from Nationwide for current customers? 2.5% with bonus 1% garanteed up to 30 of november 2014.
Ive just recenlty opened Flex Direct current account to take advantage of 4.89% interest for 12 months for 2500£
And I was wondering, since i didnt subscribe to any ISA this year just yet, to take that offer while it lasts! Seems like all providers just keep lowering rates more and more (Halifax recently 1.95 to 1.35) and santander etc.
The thing is, at the moment its better for me to keep my finances at nationwde and a bit later in the year on santander 123, coz those accounts pays good inetrest and at the same time i can take this money any time i need to use for my holidays etc.
So long story short, i dont need just yet to open an ISA, but maybe it will be smart to open 2.5% Flexclusive isa right now with 1£ and to garantee that rate for myself? in case if nationwide will follow others and lower the rate sometime soon.
So at the end of march next year i can just put the rest of my allowance on top of that 1£ and it still will be with a reasonable rate 2.5%.
I hope ive got a good logic here?
And another question is, for example i will do just that, and before 6 of april 2014 i will put the full allowance on Flexclusive ISA, so will i be able after that date to keep topping up that isa account with the next year allowance?
So i can use that rate all the way up to 30th of november 2014.
I hope i made myself clear here

P.S. I currently have an Santander 123 Major ISA fixed for 2 years for 3%, from previous tax years.

innovate

Can't see anything wrong with your plan in your situation. And yes, you should be able to pay in your 2014-15 allowance, too.

Vladislavs

innovate wrote: »

Can't see anything wrong with your plan in your situation. And yes, you should be able to pay in your 2014-15 allowance, too.

i just gotta feeling 2.5% its as much as we will be able to get in the next year or so anyway.

buglawton

Call this a naive question but here goes:

- Imagine I have an old ISA where the shares have grown to current value of £15,000.
- Obviously I can sell some and transfer the cash out and then am not allowed to transfer any new funds in.
- Also I can leave the cash inside the old ISA...
- But can I buy new shares inside that old ISA using funds already there?

All the simple ISA guides make no mention of this scenario.

saintalan

buglawton wrote: »

Call this a naive question but here goes:

- Imagine I have an old ISA where the shares have grown to current value of £15,000.
- Obviously I can see some and transfer the cash out and then am not allowed to transfer any new funds in.
- Also I can leave the cash inside the old ISA...
- But can I buy new shares inside that old ISA using funds already there?

All the simple ISA guides make no mention of this scenario.

Don't quite understand the BOLD bit.

Yes you can buy shares inside an old ISA with funds already there. That's the whole point its just a Tax Wrapper with rules about Annual Allowance etc.

If you had 2 different ISA accounts from different years you could transfer them to the other or new account providing they allow transfers in.

Alan

buglawton

<Ahem> "Obviously I can sell some" - corrected!

So that means no matter how big the value of that old ISA grows, can still sell/buy so long as no new funds are transferred in?

Wonder why none of the guides/FAQs spell out this advantageous fact?

innovate

buglawton wrote: »

So that means no matter how big the value of that old ISA grows, can still sell/buy so long as no new funds are transferred in?

Yes, the minute your money is in the ISA, any gains on it are tax free and you can re-deploy those gains as you see fit. If you keep them in the ISA, further gains on the gains remain tax-free, too. [That's how ISA millionaires got made]

Any re-investment of gains in old ISAs would not count towards your annual allowance since the latter is about new money only. However, it would be a bit unusual if you had many more than 1 S&S ISA because this would no doubt involve quite a lot of unnecessary charges. More likely, you'd just have all your S&S ISA investments in just one single S&S ISA (which you might have transferred at some stage from one platform to another).

buglawton wrote: »

Wonder why none of the guides/FAQs spell out this advantageous fact?

If you are talking of MSE guides - - they don't go into much detail for S&S ISAs.