ISA after 18 months

jzi19

If you open a cash ISA and then 12 months later you want to open a shares only ISA at another institution, do you then have 2 ISAs or can you only keep one type of ISA active at one place at a time? Also does the original ISA still earn interest tax free after a year, or is it only for the duration of the tax year?

Thanks

dunstonh

ISAs have no limit on the number you can hold of either type. The limits only apply to contributions in that tax year. Once you enter a new tax year the slate is wiped clean and you can place your money in a different ISA.

In the same tax year you can contribute to a cash ISA and an investment ISA.

debbie42

You can have multiple ISAs (cash and stocks&shares). You have so much allowance for each financial year, so if you opened a new one (or two) each year, and never transferred them, you could easily have several by now!

Existing ISAs are tax free once they are in the wrapper, and would earn interest as governed by the provider. It's as well to keep an eye on the interest as there may often be better offers around, in which case you can transfer them to other providers (which accept transfers in).

Baldur

jzi19 wrote: »

Also does the original ISA still earn interest tax free after a year, or is it only for the duration of the tax year?

Cash ISAs earn tax free interest (on both the capital and any subsequent interest) for as long as you leave the funds in the ISA.

Milarky

Remember that you also have a third option: Beginning this April, you may transfer a cash ISA to a S&S ISA provider (if they agree) but it is a one way-way transfer (between types) and cannot be reversed back into a Cash ISA later.

jzi19

Thanks everyone.