Cash ISA Advice (Finance noob alert)
Discussion
Right I guess you could call me a bit stupid as I appear to have taken out a cash ISA with no idea how it really works. Long story as follows...
I started mine late in around August last year (Cash ISA with Santander, 3.3% rate, usual bank is Lloyds). To date I've saved £4,747.11 of my £5,340 allowance for the 2011 - 2012 tax year. I've arranged for the last payment of £592.89 to be extracted from my Lloyds account on 1st April, which will give me the total allowance before the new tax year starts on 6th April. I was paid £37.02 interest in the beginning of March, but I've obviously not finished paying into it. So here are all my questions:
1) As interest has been paid for all my contributions up to March, will I get a final interest payment when I submit the final £592.89?
2) How soon would I have to wait to gain this interest as due to Santander offering lower rates for the 2012 - 2013 tax year I will need to shop around?
3) How soon do I need to let Santander know I won't be continuing the account into the new tax year?
4) Once I have all the money from the ISA including the interest earned, can I transfer this into the new ISA account I choose?
5) If yes, does this amount also earn tax free interest based on top of the £5,640 I'll be saving for the new tax year, or is it purely the £5,640 that will earn tax free interest and I'm better sticking last years savings in my Lloyds account?
6) Who is offering best rates for a 1 year cash ISA for the 2012 - 2013 tax year?
Apologies if some of these questions seem really stupid!
Thanks in advance.
I started mine late in around August last year (Cash ISA with Santander, 3.3% rate, usual bank is Lloyds). To date I've saved £4,747.11 of my £5,340 allowance for the 2011 - 2012 tax year. I've arranged for the last payment of £592.89 to be extracted from my Lloyds account on 1st April, which will give me the total allowance before the new tax year starts on 6th April. I was paid £37.02 interest in the beginning of March, but I've obviously not finished paying into it. So here are all my questions:
1) As interest has been paid for all my contributions up to March, will I get a final interest payment when I submit the final £592.89?
2) How soon would I have to wait to gain this interest as due to Santander offering lower rates for the 2012 - 2013 tax year I will need to shop around?
3) How soon do I need to let Santander know I won't be continuing the account into the new tax year?
4) Once I have all the money from the ISA including the interest earned, can I transfer this into the new ISA account I choose?
5) If yes, does this amount also earn tax free interest based on top of the £5,640 I'll be saving for the new tax year, or is it purely the £5,640 that will earn tax free interest and I'm better sticking last years savings in my Lloyds account?
6) Who is offering best rates for a 1 year cash ISA for the 2012 - 2013 tax year?
Apologies if some of these questions seem really stupid!
Thanks in advance.
The rate will be something like 0.5% for 2012-2013.
Go in to your local branch and ask them to re-new/refresh the ISA for another year, that will put you back on 3.3% for 2012-2013. Takes 2 minutes by speaking to the front desk people, did mine a week or two ago.
Alternatively you need to find another provider that will accept incoming transfers, check out the restrictions on the deals though - some wont accept incoming transfers, others have penalties if you withdraw money etc.
AFAIK 3.3% from Santander is the best rate over 1 year, there are no restrictions either.
Go in to your local branch and ask them to re-new/refresh the ISA for another year, that will put you back on 3.3% for 2012-2013. Takes 2 minutes by speaking to the front desk people, did mine a week or two ago.
Alternatively you need to find another provider that will accept incoming transfers, check out the restrictions on the deals though - some wont accept incoming transfers, others have penalties if you withdraw money etc.
AFAIK 3.3% from Santander is the best rate over 1 year, there are no restrictions either.
Find your new isa deal that will accept transfers in, apply to open the account with the new provider and fill in their ISA transfer form, they will use this to request your money form your old provider.
Do not withdraw your money yourself to pay into your new provider, it will lose its tax free wrapper and when you pay it in will use up your 2012-13 allowance.
if you do it right you will continue to earn tax free interest on this years subscription and you can either add next years to it or open another account for 2012-13 money, many providers will offer a better deal to new ISA money and thus wont allow the old money to transfer in. If you don't want lots of isa accounts just combine 2011/12 with 2012/13 subscriptions when they are both old money in 2013/14 by transferring them into one account.
this is not financial advice- i'm just a random bod on the net who officially knows nothing
Do not withdraw your money yourself to pay into your new provider, it will lose its tax free wrapper and when you pay it in will use up your 2012-13 allowance.
if you do it right you will continue to earn tax free interest on this years subscription and you can either add next years to it or open another account for 2012-13 money, many providers will offer a better deal to new ISA money and thus wont allow the old money to transfer in. If you don't want lots of isa accounts just combine 2011/12 with 2012/13 subscriptions when they are both old money in 2013/14 by transferring them into one account.
this is not financial advice- i'm just a random bod on the net who officially knows nothing
Mouse1903 said:
1) As interest has been paid for all my contributions up to March, will I get a final interest payment when I submit the final £592.89?
depends on the terms of your account. usually though if its instant access, if you select transfer whole balance on the transfer form your old provider will just add any outstanding interest, sent the money to your new provider and close the account
2) How soon would I have to wait to gain this interest as due to Santander offering lower rates for the 2012 - 2013 tax year I will need to shop around?
again depends on the terms of the account, if you have just dropped onto a instant access isa at the end of your deal see above
3) How soon do I need to let Santander know I won't be continuing the account into the new tax year?
You probably don't need to tell them. the isa transfer form from you new provider should be sufficient. but again check your account terms, do you have any notice period? have they sent you a letter telling you what will happen when your deal ends.
4) Once I have all the money from the ISA including the interest earned, can I transfer this into the new ISA account I choose?
5) If yes, does this amount also earn tax free interest based on top of the £5,640 I'll be saving for the new tax year, or is it purely the £5,640 that will earn tax free interest and I'm better sticking last years savings in my Lloyds account?
6) Who is offering best rates for a 1 year cash ISA for the 2012 - 2013 tax year?
Apologies if some of these questions seem really stupid!
Thanks in advance.
depends on the terms of your account. usually though if its instant access, if you select transfer whole balance on the transfer form your old provider will just add any outstanding interest, sent the money to your new provider and close the account
2) How soon would I have to wait to gain this interest as due to Santander offering lower rates for the 2012 - 2013 tax year I will need to shop around?
again depends on the terms of the account, if you have just dropped onto a instant access isa at the end of your deal see above
3) How soon do I need to let Santander know I won't be continuing the account into the new tax year?
You probably don't need to tell them. the isa transfer form from you new provider should be sufficient. but again check your account terms, do you have any notice period? have they sent you a letter telling you what will happen when your deal ends.
4) Once I have all the money from the ISA including the interest earned, can I transfer this into the new ISA account I choose?
5) If yes, does this amount also earn tax free interest based on top of the £5,640 I'll be saving for the new tax year, or is it purely the £5,640 that will earn tax free interest and I'm better sticking last years savings in my Lloyds account?
6) Who is offering best rates for a 1 year cash ISA for the 2012 - 2013 tax year?
Apologies if some of these questions seem really stupid!
Thanks in advance.
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