isa newbie , is this correct?

[steveo3002]

new to isa's so can i just check this is correct

opened a new isa in feb with full 20k at yorkshire building society fixed rate for 1 year

so now its a new tax year , can i open another one and place up to 20k in now ?

[nickfrog]

Yes

[steveo3002]

thank you

[FreeLitres]

Make sure you do not make any more deposits into the first ISA. You can only pay into one cash ISA each tax year.

[steveo3002]

yes planned to not touch current one

open new deal and pay up to 20k into that

not sure how to proceed when the 12 months is up on the first , but i guess i will ask later

[bitchstewie]

You should be able to transfer it to another provider easily enough.

[FreeLitres]

steveo3002 said:

yes planned to not touch current one

open new deal and pay up to 20k into that

not sure how to proceed when the 12 months is up on the first , but i guess i will ask later

Good question! I just took out my first fixed rate deal this year. I'm guessing you need to transfer your fixed deal ISA into a new deal for this year? What interest rate (if any) does the old ISA default to after the fixed period is over?

[boyse7en]

steveo3002 said:

not sure how to proceed when the 12 months is up on the first , but i guess i will ask later

You can just leave it running if it has a decent interest rate or is an equities isa. Or you can transfer it to another provider if you prefer

[Steve H]

Cant you just add to the current fixed rate isa as we are in a new financial year?

[steveo3002]

boyse7en said:

You can just leave it running if it has a decent interest rate or is an equities isa. Or you can transfer it to another provider if you prefer

so when 12 months is up i can transfer to any other provider as i wish not worrying about tax years etc as its already opened ?

[bitchstewie]

Yes.

Just think of it as a big wrapper that can all be in one place or spread over multiple places and which can be moved between providers.

Some providers have some restrictions so the nitty gritty may vary a little but the most important thing is once it's in the ISA wrapper don't withdraw it from the ISA (unless you actually need to).

[The Leaper]

As is well known, if transferring an previous ISA to a new ISA that you have set up, ALWAYS use the new ISA provider to process the transaction, otherwise if you DIY then you'll be taking the transferring ISA out of its tax wrapper and the tax relief on it for the future is lost.

R.

[steveo3002]

Steve H said:

Cant you just add to the current fixed rate isa as we are in a new financial year?

possibly , same place has a slightly better rate plus 6 withdrawals a year on offer now so thought id go with that , or maybe better still elsewhere

[Gunso]

FreeLitres said:

Make sure you do not make any more deposits into the first ISA. You can only pay into one cash ISA each tax year.

My understanding is different to this. Because the first £20,000 was paid in in a different tax year you can use this years allowance in the same ISA.

[AdamV12V]

Just to add it sounds like the OP opened a fixed rate ISA a few months ago. Fixed rate deals usually have a short period of time that you can pay into them, somewhere between 14 and 30 days usually, after that they are closed and then locked off to additional investments. Thats the same for ISA's and normal fixed rate savings a/cs to be fair.

Once the end of the fixed term is getting close your provider will write to you with options for what happens when it matures. They will often offer you a new fixed term ISA deal, and always offer you the option to either put it into a standard variable flexi ISA (usually with a worse interest rate), or take it out of the ISA and back into a normal a/c.

If you dont like their fixed rate renewal offer then transfer it into their variable flexi ISA. Once you have that a/c number, then you can goto another ISA provider, either another existing ISA you already have, or a brand new one you have just opened, and transfer in the variable flexi ISA from the other old provider.