ISA rules, am i wrong?

tirednewdad

I held my previous years ISA's in a natwest ISA (before i discovered this site;) ), but this financail year i opened an ABBEY ISA.

I asked that all but £50 be transfered to my new ABBEY ISA, as i understood that ISA's can be transfered at anytime during the year but you can only have one new ISA per year.

All seemed fine until i recieved a statement from Natwest telling me that Abbey have tranfered all the money over and Natwest closed my ISA account. I rang Natwest up twice to see if this account cancellation could be reversed as i still wanted the flexability of having my NAtwest ISA open.
Both times i was met with the same reply- 'you can only own one cash isa at a time (and therefore the ISA had to be with the same provider)'

I said that, i though that you could own more than one cash ISA at a time by owning previous years ISA's at different providers- but only open 1 ISA a year. Both times i asked to be reffered to the senior officer but got the same reply.

I am more than happy to eat hubble pie, but please someone tell me if I am correct or if Natwest are correct:A

dunstonh

I asked that all but £50 be transfered to my new ABBEY ISA, as i understood that ISA's can be transfered at anytime during the year but you can only have one new ISA per year.

Not quite. You can hold as many ISAs as you like. However, you can only contribute into one ISA (of that type. i.e. cash or stocks and shares) in that tax year (barring a transfer of that years ISA).

Both times i was met with the same reply- 'you can only own one cash isa at a time (and therefore the ISA had to be with the same provider)'

Only if it relates to current year contributions. Otherwise you can have as many as you like.

Some providers will not allow a splitting of the ISA. They insist on all or nothing.

tirednewdad

dunstonh wrote: »

Not quite. You can hold as many ISAs as you like. However, you can only contribute into one ISA (of that type. i.e. cash or stocks and shares) in that tax year (barring a transfer of that years ISA).



Only if it relates to current year contributions. Otherwise you can have as many as you like.

- sorry i couldn't quite put into word what i meant- but it was basically what you cleared up.:T


Some providers will not allow a splitting of the ISA. They insist on all or nothing.

Abbey seemed to allow it in store, perhaps it is just NATWEST?

LongTermLurker

tirednewdad wrote: »

I held my previous years ISA's in a natwest ISA (before i discovered this site;) ), but this financail year i opened an ABBEY ISA.

I asked that all but £50 be transfered to my new ABBEY ISA, as i understood that ISA's can be transfered at anytime during the year but you can only have one new ISA per year.

All seemed fine until i recieved a statement from Natwest telling me that Abbey have tranfered all the money over and Natwest closed my ISA account. I rang Natwest up twice to see if this account cancellation could be reversed as i still wanted the flexability of having my NAtwest ISA open.

I don't really see the benefit in keeping the £50 in the NW ISA, as you wouldn't be able to put any more money in (you'd be contributing to the Abbey instead). If you wanted to pay into NW next year, it isn't necessary to keep the old one open, just open a new one with them.

Baldur

Totally agree with LongTermLurker, there's absolutely no benefit from keeping the old account open. You would almost certainly have to submit a new application after a year anyway, as this is required by many (if not all) ISA managers where inactive ISA accounts are concerned.

The only situations in which I would keep two or more Cash ISA accounts open is where I wished to stay below the FSCS level of £35,000 with any single institution or because fixed-rate ISA maturity dates do not match with my required transfer dates.

Dithering_Dad

I was also a little confused as to the purpose of leaving the £50 behind in an account that pays less interest. As other posters have already stated, you can't add to the £50 because your 2008 ISA is with Abbey.

You'd only every add to the £50 if Natwest ever had the highest ISA rate (an unlikely event) and then you'd probably transfer all of your ISAs back there anyway.

tirednewdad

The reason i wanted to keep the NATWEST ISA open was if the Abbey ISA interest rate dropped bellow it i could transfer back.

I didn't think that more than one ISA account could be opened in 1 year. Am i allowed to open an ISA with another provider (providing i don't exceed my £3600 limit), if i transfer all my ISA's too them?
-cause i didn't think this was possible, hence leaving the natwest ISA open.

LongTermLurker

tirednewdad wrote: »

The reason i wanted to keep the NATWEST ISA open was if the Abbey ISA interest rate dropped bellow it i could transfer back.

I think you should differentiate between "opening an ISA" and "transferring an ISA" - afaik you don't need an existing ISA to transfer another one into. After all, I suspect you didn't have an Abbey ISA 2 months ago but still did the transfer?

tirednewdad wrote: »

I didn't think that more than one ISA account could be opened in 1 year.

You can't open & contribute to 2 of the same type of ISA in a year unless you transfer one of them into the other - then I guess you're not opening a second ISA but transferring the first and continuing to contribute. However, in my mind, moving ISAs at less than 12 month intervals would be too tedious.

tirednewdad wrote: »

Am i allowed to open an ISA with another provider (providing i don't exceed my £3600 limit), if i transfer all my ISA's too them?
-cause i didn't think this was possible, hence leaving the natwest ISA open.

That's my understanding, again because you are transferring an ISA but Dunstonh can probably confirm or discount that.