I have a mini-isa with Virgin - want to open Icesave cash ISA

supercelt

Currently I have a Mini ISA with Virgin but wish to open an Icesave cash ISA.

Can someone advise me of what steps I have to take? Can I have both a mini and cash ISA with seperate banks?

Only have £40 in the Virgin Mini ISA but want to withdraw this and move it to the Icesave, for which I have the required £1000 to put away.

Advice?

Also, how soon can I withdraw the money form the Icesave. I want to take out £700 of it for a holiday next month but continue to save afterwards. I know the £1k is required, and I have that available but how soon can I withdraw from that £1k and is this allowed?

Milarky

What sort of ISA is the Virgin please? (not enough information..)

supercelt

Mini ISA with Virgin..

dunstonh

supercelt wrote: »

Mini ISA with Virgin..

Yes, but what type of ISA. Stocks and shares or cash?

Lavendyr

supercelt wrote: »

Currently I have a Mini ISA with Virgin but wish to open an Icesave cash ISA.

Is the Virgin ISA a cash ISA or a stocks & shares ISA? Did you open it this tax year (i.e. from April 08) or in a previous year?

supercelt wrote: »

Can someone advise me of what steps I have to take? Can I have both a mini and cash ISA with seperate banks?

You can have different ISAs with as many institutions as you like, as long as you do not exceed the maximum allowance in any one year and as long as you keep all your subscriptions made in any given year in one ISA.

supercelt wrote: »

Only have £40 in the Virgin Mini ISA but want to withdraw this and move it to the Icesave, for which I have the required £1000 to put away.

Do NOT withdraw anything from your ISA. If you want to keep it in an ISA (i.e. tax-free) you need to follow the correct transfer procedure. If you withdraw the money you will lose its tax-free status.

supercelt wrote: »

Advice?

Is difficult to give without knowing:
a) whether the Virgin ISA is cash or stocks & shares
b) when the Virgin ISA was opened/last subscribed to (i.e. when you put the money into it)

supercelt wrote: »

Also, how soon can I withdraw the money form the Icesave. I want to take out £700 of it for a holiday next month but continue to save afterwards. I know the £1k is required, and I have that available but how soon can I withdraw from that £1k and is this allowed?

You can withdraw what you like, although you may find in Icesave's T&Cs that they will not pay any interest (or a minimal interest rate) if your balance in the ISA is below £1000 at any point. But remember that once you withdraw cash from a cash ISA you cannot put it back in again. You can deposit a total of £3600 in this tax year, but if you were, say, to deposit £3600 tomorrow, then withdraw £1000 the day after, you can't just put that £1000 back in - it's no longer eligible for tax-free status.

So if you're going to need the money that soon, an ISA might not be the best place to keep it, as you might want to use that ISA allowance later on in the year, and you'd then find that you can't, because you've already wasted it depositing and swiftly withdrawing funds from your ISA.

Please have a look at Martin's introduction to ISAs as it does sound as though you don't really understand how they work (is not meant offensively, just an observation) and it might help you to understand a little better so that you can make a more informed decision. The weblink is http://www.moneysavingexpert.com/savings/best-cash-isa .

Regards

supercelt

Thanks for your comments.

It's a Virgin Cash ISA I have. It was opened in February.

I was aware of the £3600 rule with withdrawing and depositing as you descirbe.

I am not sure what you mean by losing it's tax-free status if I withdraw though?

Put simply, I want to open an Icesave cash ISA and close the Virgin one. How do I go about this?

Pagan98

You currently have 40 in last year's Virgin ISA. If you were to withdraw that money it would lose its tax-free status. If you then wanted to put it back in another ISA you would be limited by this year's limits (up to 3,600 in a cash ISA), so you could only put in the 40 plus another 3560 of new money.

What you should do instead is open the Icesave ISA and then transfer the Virgin ISA by completing a Transfer-In form you get from Icesave. This will transfer the 40 to Icesave and leave the entirety of this year's 3600 cash ISA allowance available for new funds.

However, why pay money into the ISA if you are expecting to withdraw it in the next couple of months? - the advantage from the tax break is minimal and you've then used up part of your allowance.

supercelt

Ah OK that makes sense now. Thanks.

Perhaps I should instead open an instant access savings account until I have funds to put away that I won't want to withdraw for a while?