Isa Help!

[Tinkerpuss]

I am very new to ISA's and only took out my first one last October. Does this mean I stay on this rate until next October when my year is up, or should I be looking to transfer before the end of the tax year on 5th April as the company I am with may not keep me at the same rate.
My main confusion is that I hear of people transferring ISAS at different times of the year, so I am not sure if taking out an ISA mean for a year from depositing the money or, for the tax year.

[factor-fiction]

You can transfer part way through the year. Just make sure your chosen new provider accepts transfers-in.

[ladybirder]

Unless you have gone for a Fixed Rate ISA then you can move your money any time. Always keep an eye on your rates. Did it say when you took it our how long the rate was for?

[factor-fiction]

I think Laybirder meant Fixed Term. That's a good point- you need to check you aren't 'locked in' or that there are no penalties for withdrawal/transfer

[ladybirder]

Yes of course, Fixed Term, sorry:-(

[VHG]

Note that you must transfer the money ISA to ISA, or it counts towards your ISA allowance for that year.

You cant take the money out of an old ISA (as a cheque or cash) and then put it in a new ISA, if you do it is counted as THIS years ISA not the previous years ISA.

If you find a company who will accept transfers in then talk to them and give them the details of the old ISA and they will contact the company and get the money transferred to the new ISA.

Note ISAs can run for more than one year. If you are happy to lock the money in for say 2 years you can sign up for a 2 year ISA.

Do keep an eye on interets rates. Banks can often drop them to really low rates - 0.5% or even 0.1% so always keep track of when you ISA "runs out" and get it moved to a better rate.

[factor-fiction]

^And sorry I got your name wrong

[VHG]

Go talk to your bank - most have financial advisors and often you dont need to book an appointment.

They will tell you the current interest rate, and when that rate may be reduced and so on.

SOME banks may let you transfer an ISA to a different ISA within the same bank, but some may not.

I had a NatWest ISA a few years ago where the interest rate got very low, so I went to see them and asked if I could transfer to a better ISA within NatWest and they said no.

So I went to Santander where I signed up for a 2 Year ISA and they got the money transferred from NatWest.

But my wife had an ISA with Halifax and that was paying low rates, but she went into there a week or so back and they let her transfer it to an ISA still within Halifax.

So when it is time to move it, you need to see if the bank will let you switch ISA within the same company, or if you have to move it to another company.

[Tinkerpuss]

Thanks folks, it never even entered my head to look at the paperwork and find out if it is fixed term or not. I know I cannot withdraw the money then move it but if I am not, is it best to wait until April when there is likely to be more competition amongst banks for your money, or does it not work this way?

[vetuste_ennemi]

They're not competing with each other. They'll continue paying below the rate of inflation, Tinkerpuss. Just make sure you get 2-3% fixed term and check what happens at the end of term. The reptiles usually move it to their lowest rate ISA (0.1%!) hoping you don't notice. If you don't need the cash think about putinng the money in a stocks and shares ISA.

[factor-fiction]

Yes, rates have been falling on ISAs. The top rates are well below the top rates of 6 months ago. Savings rates are at an all-time low and have plummeted swiftly since the government launched the Funding for Lending scheme in July. This allows banks and building societies to borrow from the Bank of England for up to four years in order to improve lending rates to households and businesses. However, because banks are no longer reliant on savers' deposits for their funding, the rates on new issues of savings accounts and Isas have been falling ever since as they no longer need to compete hard to get the funds they need.