Full ISA Guide Discussion Area
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Hello,
I have a Direct ISA 6 with Santander which has £12K from September last year. The rate is 2.75% on balances above 9K for one year, after that it becomes 2.5% on balances above 14K for another year but 0.5% otherwise. I just opened a Flexible ISA which is 2.8%+BOE rate with £5340.
I wanted to top up the Direct ISA with about 2K to get the higher rate, as well as open the Flexible one with £3K. The "advisor" told me that this is not allowed. Is that right? I was skeptical and tried to look in this guide, but couldn't see anything. But from reading some posts in this thread, it looks like that is indeed the case. Does anyone know the rationale behind this rule?
In September 2011 I am expecting there to be better ISAs available and then I could transfer the direct ISA to somewhere else when its rate drops to 0.5%. Meanwhile the flexible ISA rate should also go up. Does anyone think it was a bad idea to put the full amount for this tax year into the Flexible ISA? (I know some people might say banking with Santander is a bad idea but they have been OK to me and are the only bank I can get to without paying for a bus!)0 -
I wanted to top up the Direct ISA with about 2K to get the higher rate, as well as open the Flexible one with £3K. The "advisor" told me that this is not allowed. Is that right? I was skeptical and tried to look in this guide, but couldn't see anything. But from reading some posts in this thread, it looks like that is indeed the case. Does anyone know the rationale behind this rule?
You can put new funds into only one cash ISA per year, so the advisor was correct.
It's just one of the limits on ISAs - there's no more reasoning behind it than the actual funding limits.0 -
The Flexible ISA pays 3.3% with a BoE base rate tracking guarantee for 1 year, not 2.8%....I just opened a Flexible ISA which is 2.8%+BOE rate with £5340.
The rationale is to simplify the administration and monitoring of successive years' ISA allowances, you are permitted to subscribe (pay new money into) to one Cash ISA per tax year.I wanted to top up the Direct ISA with about 2K to get the higher rate, as well as open the Flexible one with £3K. The "advisor" told me that this is not allowed. Is that right? I was skeptical and tried to look in this guide, but couldn't see anything. But from reading some posts in this thread, it looks like that is indeed the case. Does anyone know the rationale behind this rule?
Your choice - I had last year's Flexible ISA 2, as it paid a good rate with a base rate guarantee (which was immediately transferred elsewhere when the bonus rate ceased) and have taken out the Flexible ISA 3 for my 2011/12 allowance.In September 2011 I am expecting there to be better ISAs available and then I could transfer the direct ISA to somewhere else when its rate drops to 0.5%. Meanwhile the flexible ISA rate should also go up. Does anyone think it was a bad idea to put the full amount for this tax year into the Flexible ISA? (I know some people might say banking with Santander is a bad idea but they have been OK to me and are the only bank I can get to without paying for a bus!)0 -
Does anyone think it was a bad idea to put the full amount for this tax year into the Flexible ISA?
No, nothing wrong with that, if you can afford to put in the full amount then doing it as soon as possible is a sendible idea! It's earning interest every day it's in there so no reason to wait.
And if a better-paying accout came along later in the year you'd be free to transfer that £5340 across.0 -
The account pays "Base Rate + 2.8%", as hermante said - although it's advertised as 3.3% as this is the minimum that it will pay, i.e. it won't track drops in base rate to below 0.5%.0 -
Thanks all for replying.The rationale is to simplify the administration and monitoring of successive years' ISA allowances, you are permitted to subscribe (pay new money into) to one Cash ISA per tax year.
I suppose that also means I can only subscribe to one cash ISA ONCE per year? If saving for long term you would always subscribe the maximum but if planning to withdraw, it might make more sense to put in half the limit halfway during the year. And after the next 6th April I can split that up as many ways as I like (e.g if 5 banks happened to offering the same high rate)?0 -
I suppose that also means I can only subscribe to one cash ISA ONCE per year?
No, you can open an ISA, put some money in and add more money to it later in the year. The stipulation is that the new funds must all go into one ISA. At the end of the tax-year, the ISA provider reports to HMRC, who don't care if you put your full ISA allowance in in one go on April 6th, or whether you paid a bit in each week through the whole tax year.If saving for long term you would always subscribe the maximum but if planning to withdraw, it might make more sense to put in half the limit halfway during the year.
If you might need the funds, it makes sense to put them somewhere else rather than your ISA. If you put them into the ISA, then take them out, you'll have lost the ability to put that amount back in - so you'll have lost part of your ISA allowance.And after the next 6th April I can split that up as many ways as I like (e.g if 5 banks happened to offering the same high rate)?
Yes. Or you might want some funds in a longer-term, fixed-rate account and some in an instant-access account. As long as the funds are from previous years' ISA allowances, you can transfer them around however you want.0 -
No, it doesn't.I suppose that also means I can only subscribe to one cash ISA ONCE per year?
The number of times that you can subscribe to your chosen ISA for each tax year depends on the Ts & Cs of the chosen account, e.g. many fixed-rate Cash ISAs only permit an opening deposit (or further deposits while that account is an open issue), while Regular Saver ISAs permit monthly subscriptions and most variable-rate ISAs permit any number of subscriptions - all of these methods are, of course, subject to the maximum Cash ISA allowance.
You could also transfer your Cash ISA (Ts & Cs permitting) to a different ISA provider that accepts ISA transfers and continue to subscribe to it after the transfer, again subject to the maximum annual allowance. Theoretically, you could transfer the ISA several times in a tax year, but would potentially lose quite a lot of interest in the process.
The reason for this is that the transferred funds are the same ISA, only the provider(s) would have changed.
Current tax year's ISA funds must be transferred whole, while previous tax year's/years' funds can be partially transferred.0 -
Say I have 5 cash ISA's in 5 different places, each with £5000 in them. Can I move all these into a new ISA which would then hold £25000 in "old" money, plus this years "new" money allowance, so that the total of old + new would then earn this year's interest deal?0
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Say I have 5 cash ISA's in 5 different places, each with £5000 in them. Can I move all these into a new ISA which would then hold £25000 in "old" money, plus this years "new" money allowance, so that the total of old + new would then earn this year's interest deal?
Yes, assuming the ISA you are transferring to allows transfers. For example, the Barclays Golden ISA 3 doesn't; whereas the Halifax Direct Reward ISA does.0
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