Transferring ISA

Keiron_2

Hi everybody, a couple of naive questions for the experts..!

1) When transferring savings from past tax years from one ISA to another (from a B&B ISA Easy Saver to a Co-op ISA) do I have to open a new ISA first? Or does the act of transferring your savings create it?

2) My B&B account calculates interest monthly (I think) but pays it annually - mine is due mid-October. If I transfer before then, will I lose all the interest I have been accruing but have not yet been paid? Or does the interest also get transferred?

Any help would be much appreciated.

Keiron

Baldur

Keiron wrote: »

1) When transferring savings from past tax years from one ISA to another (from a B&B ISA Easy Saver to a Co-op ISA) do I have to open a new ISA first? Or does the act of transferring your savings create it?

Without an account number into which your funds can be transferred, where will they go? If you apply in branch, the account opening & transfer forms should be completed by branch staff simultaneously.

2) My B&B account calculates interest monthly (I think) but pays it annually - mine is due mid-October. If I transfer before then, will I lose all the interest I have been accruing but have not yet been paid? Or does the interest also get transferred?

When your funds are transferred, the account is closed - your funds, including all interest to the date of closure, will be transferred.

whu

Hi
1 You will need to open an ISA with the new provider and then fill in forms with them so that they request the transfer from the old provider
2 Are you currently in a fixed period ISA?

Keiron_2

Thank you both for your replies.

In response to whu - if by fixed period ISA you mean am I locked in for 1 year (or x years), no, as far as I know I can close it at any time. However, they have only sent me 1 statement previously, on the 1-year anniversary of opening the account, detailing the interest the account has earned, so I think it pays annually. (This would be easier to answer but I can no longer find any info about the ISA Easy Saver on B&B's website, and don't have any in my files besides my statement and a couple of letters.)

I guess I should take out the new ISA, and then wait till mid-August when my yearly interest is paid on the old ISA - then transfer everything in the old ISA to the new one? Does this seem like a sensible course of action?

Thanks again for your help.

Baldur

Keiron wrote: »

I guess I should take out the new ISA, and then wait till mid-August when my yearly interest is paid on the old ISA - then transfer everything in the old ISA to the new one? Does this seem like a sensible course of action?

That depends on the respective interest rates and whether you are potentially likely to benefit more or less, by leaving your funds with B&B for the next 6 weeks or so, than by transferring them straight away - remember that it can take a month (and in some cases several months) for transfers to be completed,

Keiron_2

One final question, then: is it okay to open a new ISA, start paying sums of money in for this tax year, and then several months later transfer money in from an old ISA?

Baldur

Keiron wrote: »

One final question, then: is it okay to open a new ISA, start paying sums of money in for this tax year, and then several months later transfer money in from an old ISA?

Yes, Cash ISAs can be transferred at any time (subject to any product-specific limitations, e.g. fixed rate term, notice required, etc).

In several months time, you may find that the one which you open now is no longer competitive or a better rate is available elsewhere, so you could transfer your old Cash ISA funds (and, if you wish, your new ISA funds) to a totally different provider.

Having said "you may find that the one which you open now is no longer competitive", the Co-op's Cash ISA doesn't appear to be competitive even now, at 4.75% AER, when many others are offering rates of 6% or above - see this post

Keiron_2

Thanks very much Baldur - you've been a great help.