What happens if an ISA issue closes and you haven't put in £3600 pounds yet?

dfitps

What happens if an ISA issue closes and you haven't put in £3600 pounds yet?

E.g. a Northern Rock fixed-rate ISA - am thinking here of issue 69 into which I want to transfer an existing ISA. I was thinking of just putting this year's allowance into there too, but this would be spread out over the whole year - but what happens if issue 69 closes? Will I then be able to open a new cash ISA for the rest of this year's allowance, even though that's technically opening two in one year? Or will I be stuck and never able to put in my full allowance for this year?

And if I can open a new ISA, because an existing 08-09 issue has closed, am I stuck with opening a new NR one, or would I be able to go elsewhere?

I'm not sure I necessarily definitely want to put this year's allowance into that ISA at all, but again don't see how I can put it elsewhere without opening a second cash ISA. I can see how in theory the NR will only be being opened for a transfer so shouldn't count, but in practice does that work or will I be refused the chance to open another one anywhere else?

Would really appreciate any replies - am new to ISA transfers, having allowed my current one to languish for far too many years at a rubbish rate.

Lokolo

What do you mean by 'closes'? Do you mean mature? (i.e. end of the fixed rate when you get paid interest?) I am assuming so.

You can open another ISA but £0 in. Transfer your NR ISA into that one, and pay the rest of the £3600 into this.

You must not open an ISA and put money into it until you ahve transferred previous monies from this tax year over.

You must do this by filling an ISA transfer form in from your new provider.

Milarky

Lokolo wrote: »

What do you mean by 'closes'? Do you mean mature? (i.e. end of the fixed rate when you get paid interest?)

No, I think the OP means 'closes' to new additions

From NR FRISA Terms and Conditions:
(a) How to pay into your Account
(i) The initial deposit can be made into your Account by cash (branch
accounts only*), cheque and by transfer from another Northern Rock
account (subject to the Terms and Conditions applying to that account).
Once your Account is opened and whilst the Fixed Rate Cash ISA is being
offered further deposits can be made using these methods or by payment
by BACS, CHAPS or standing order (subject to the Terms and Conditions
applying to that Account).

I would assume that if the issue is withdrawn 'mid-year' the OP's remaining annual ISA suscription can be paid into another NR ISA - subject to any minimum - possibly another FRISA - as Northern Rock remains the OP's ISA 'manager' for 2008/09.

dfitps: You should contact Northern Rock to ask them if you can (for example) open a FRISA and a variable rate ISA together - with 'new money'. If they say 'yes' that removes the uncertainty for me. They ought to know what you are on about - ISAs are restricted to one manager at a time not a single ISA account..

dfitps

Thanks for replies! I phoned NR up today and was quite surprised to find that yes, that's it, you're stuffed if the issue closes before you've put your full allowance in: you have to close that account before you can put the rest of your allowance anywhere else (which of course incurs a penalty because it's a fixed rate ISA).

They did say though that yes, I could open a separate variable rate ISA for the new money - they also said that this could be with them or with someone else. Does that sound right?

I now want to send off the application for the NR fixed rate ISA to transfer the old money in, but keep an A&L direct ISA account that I had been going to cancel (because of the awful hassles people seem to have with transfers) for the 08-09 new money (because I can't put this year's allowance in all at once, and the NR one may close before I've put it all in). Both NR and A&L have now said that's OK (on the phone), but I'm worried it's somehow not going to work as both accounts are new cash ISA accounts this year even though only one will have new money going into it. Is there some kind of central system somewhere that's likely to complain about me having opened two cash ISAs this year even though one is only for a transfer?

Baldur

dfitps wrote: »

I'm worried it's somehow not going to work as both accounts are new cash ISA accounts this year even though only one will have new money going into it.

Accounts opened specifically for ISA transfers and NO new money do not count as 'new accounts' - only the one which you open and to which you subscribe new money is a 'new ISA account'.