Mini cash ISAs

I have a First Direct ISA (3.55%) with 4k in. I could get an ISA with a different company (eg If.com) which pays better interest (4.35%); is it worth opening one and transferring 3k over NOW, or waiting till closer to the end of tax year?

Is it better to have monthly or yearly interest on one of these cash ISAs?

TIA tim

Reply to
Tim
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The sooner the better, because then you get more of the benefit of the interest rate differential. Should be worth about £10 if you do it now.

If you are not planning to add any more money this tax year, and if none of the £4k were put into the old ISA this year, then you can just withdraw the cash and use it to open the new ISA. Otherwise make sure you use the proper transfer procedure.

That depends on what the rates are. Compare the AERs.

If the monthly rate is a twelfth of the annual rate, it will compound to more than the annual rate. But chances are it won't be.

Reply to
Ronald Raygun

IF.com set it so that the AER for both monthly and annually is the same.

The only problem I had with Intelligent Finance was that they wouldn't open an ISA without a minimum deposit of 1, I ended up having to call them and get the call centre agent to speak to the regulation team to find out what to do before they would give me the account number that had to be quoted on the transfer authority as my ISA was fully subscribed for the current year as the transfer is carried out direct between ISA providers for it to remain within the rules.

Chris

Reply to
Chris

In message , Ronald Raygun writes

Couldnt he only use £3k to do that?

Reply to
john boyle

If you have already contributed to your ISA during this financial year, then you cannot open a second one. You can ask IF to arrange a transfer of the existing ISA to them. If you have not put any money in during this year, then you can still get them to make the transfer, and you can also make use of your allowance for this year to top it up in either case.

Usually the APR is the same for monthly or annual interest, but unless you wish to withdraw the interest, there is no advantage in having it compounding monthly, except possible if the interest rate rises during the year, when there could be an advantage.

Reply to
Terry Harper

Quite correct, it would be classed as new subscription for this tax year and is thus limited to 3000, it would be better to do the transfer the proper way as it would leave you options open if on the 1st April you decide you have some surplus money which you might as well pay into you ISA before the end of the tax year (allowing 3 working days for Direct Debit or BACS transfer to get then money in)

Reply to
Chris

Just testing.

Reply to
Ronald Raygun

OK, well I have contributed this year, and can contribute a further 900 odd before I reach the limit. Sooo, can I open an ISA with If.com and get them to transfer 3k to it? Can I continue to add to my original, up to the limit?

TIA tim

Reply to
Tim

You can transfer all of you existing ISA, full or part of any subscriptions from previous tax years, but if you transfer your current year subscription you must transfer the full amount made this year, you can leave previous years.

For example I had

2000/1 3000 2001/2 3000 2002/3 3000 2003/4 1500 plus accured interest

I decided to transfer all of my 01/02, 02/03 and the current years plus all accured interest but to leave the 2000/1 in the existing account as it is branch based and thus quicker to access.

On you should be able to tell you existing provider which years subscriptions you want to take, another point to note is that it is advisable to ask you existing provider for a transfer out form and fill in both this and the one IF send you, theirs is not very good as it is written to request a full transfer of all funds.

Chris

Reply to
Chris

In message , Chris writes

Apart form the 00/01 year, were the rest all with the same provider and in the same account?

Not all deposit takers will allow you to transfer selected years, its all or nothing.

Reply to
john boyle

Actually it isn't that bad - if you ignore the £1 deposit bit and simply wait for the regulation team to transfer the ISA capital it works fine - AFAIR the £1 is simply the lowest deposit their forms get printed with. In my case this was explained to me on the phone "ignore the £1" bit, though they had problems with the concept of a TOISA transfer (but it did eventually get sorted).

IF was one of the very few banks that actually sent me the right forms for my ISA transfer (though not the TOISA first time round).

Thom

Reply to
Thom

Thks for the advice folks. I think I'll transfer to If.com, although the interest rate isn't 'much' different, I guess it all helps. tim

Reply to
Tim

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