In need of some Simple Savings advice

Jakaru

While I've always tried to Save, I'll confess to being quite lazy about where I keep the money - having a Cash ISA and a Savings account both in RBS with my current account (makes online banking so easy when everythings in one place!).

But, with my continuing dedication to the MSE-way, I'm keen to start moving money around the various good savings accounts etc - but want to fill in some basic knowledge gaps to allow me to do this. I'm sure you can all help me out!

I have around £4,500 in the ISA - and I have about £1,000 in the Regular account. I'm currently also paying into the Halifax Childrens regular saver, I'm intending to keep the money I'm saving for my Daughter moving around as much as possible.

1) You can have only 1 Cash and 1 Share ISA at any one time?

OR if I'm reading other threads right, you can have as many Cash ISAs as you like, as long as you are only actively paying into 1 in any tax year?

2) If I want to move to a Better Cash ISA, when I apply for a new one, you enter in details of your Old ISA and the money is transferred and the old ISA closed?

3) When you transfer money from an Old ISA into a new ISA - that amount Doesn't get included in your yearly pay-in allowance, whereas it would if you were for example to WIthdraw it and pay it into a new account?

4) Given I'm seeing ISAs from just 5% and with the new Regular Savings accounts at 7% - am I still better focusing on ISAs so there's no Tax element coming into play?

I'm open to any and all general advice about the best way to manage both currently held money and the monthly pay-ins for best advantage.

Thanks in advance!

CLAPTON

1..you can open or pay into one cash ISA and one shares ISA each year... so in 10 years time you could have 10 cash ISAs and 10 share ISAs.
OR you can pay into one ISA each year for 10 years... or anything in bewtween.... but in any one year you can only pay into one ISA of each type.

2. yes

3. thats right, it doesn't get included in your yearly allowance .... also if you withdraw it and then paid it into a new ISA you would lose the benefit of having two years tax free cash.

4. 7% after tax is equivalent to 7% x 0.8 = 5.6% is you pax tax at the standard rate.

Jakaru

Thanks for that.

So to (4), what I'm looking at then is ensuring that my ISA is bringing back a better rate than the highest available standard account -20%, makes sense.

The opening-paying in thing - as I've paid into my Current ISA in this Tax Year, I'm scuppered as to opening a new one Without transferring funds, and stacking up the ISAs as you mention. If I wish to keep my current ISA open for ease (i.e. stop paying in, and then just open a new one when a good deal is available), I really have to wait until the Next Tax year - am I getting that right?

Though, logically speaking, as long as your ISA amount is under the £35k mark, so you're not getting risks associated with keeping all funds in one place, you really don't want to Stack ISAs, you want to move as much money as possible into That years best deal I'd have thought?

Maybe I could stop my regular payments into my ISA - and pay them into a Savings account all the time - and then when each new Tax Year comes around, look for a new ISA to open, knowing that I've got the money sat there ready to move into it, with no complications. Not perhaps the MOST profitable approach (though almost certainly better than just continuing as I am now, which is the whole point), but I'm looking for a method thats 'plan-able' in some way. It would at least be organised and work-able for me. Allowing me to leave a regular standing order in place, draw on the funds if needed, and still have ISAs in place paying good interest on the bulk of the fund.

You end up with loads of ISAs paying different rates though, and that perhaps defeats the idea of something thats easy to manage!

Hmmmm....